c. How many shares would an investor have if he or she originally had 80? Number of shares shares d. What is the investor's total investment worth before and after the stock dividend if the P/E ratio remains constant? (There may be a slight difference due to rounding.) (Do not round intermediate calculations. Round the After stock dividend answer to 2 decimal places.) Before stock dividend After stock dividend $ Total investment e-1. Assume Mr. Neo, the president of Matrix Corp., wishes to benefit the shareholder by keeping the cash dividend at a previous level of $1.25 in spite of the fact that the shareholders now have 15 percent more shares. Because the cash dividend is not reduced, the share price is assumed to remain at $32. What is an investor's total investment worth after the stock dividend if he/she had 80 shares before the stock dividend? Total investment e-2. Under the scenario described in part e-1, is the investor better off? ○ Yes ○ No f. What is the dividend yield on the shares under the scenario described in part e-1? (Round the final answer to 2 decimal places.) Dividend yield % Matrix Corp Inc. is considering a 15 percent stock dividend. The capital accounts are as follows: Common stock (6,000,000 shares) Retained earnings Net worth $60,000,000 75,000,000 $135,000,000 The company's stock is selling for $32 per share. The company had total earnings of $19,200,000 with 6,000,000 shares outstanding and EPS were $3.20. The firm has a P/E ratio of 10.00(rounded). a. Restate the equity section at year end after the 15 percent stock dividend. Show the new capital accounts. Common stock Retained earnings Net worth b. Restate the EPS and share price after the stock split (Assume the P/E ratio remains constant). (Do not round intermediate calculations. Round the final answers to 2 decimal places.) EPS Share price $
c. How many shares would an investor have if he or she originally had 80? Number of shares shares d. What is the investor's total investment worth before and after the stock dividend if the P/E ratio remains constant? (There may be a slight difference due to rounding.) (Do not round intermediate calculations. Round the After stock dividend answer to 2 decimal places.) Before stock dividend After stock dividend $ Total investment e-1. Assume Mr. Neo, the president of Matrix Corp., wishes to benefit the shareholder by keeping the cash dividend at a previous level of $1.25 in spite of the fact that the shareholders now have 15 percent more shares. Because the cash dividend is not reduced, the share price is assumed to remain at $32. What is an investor's total investment worth after the stock dividend if he/she had 80 shares before the stock dividend? Total investment e-2. Under the scenario described in part e-1, is the investor better off? ○ Yes ○ No f. What is the dividend yield on the shares under the scenario described in part e-1? (Round the final answer to 2 decimal places.) Dividend yield % Matrix Corp Inc. is considering a 15 percent stock dividend. The capital accounts are as follows: Common stock (6,000,000 shares) Retained earnings Net worth $60,000,000 75,000,000 $135,000,000 The company's stock is selling for $32 per share. The company had total earnings of $19,200,000 with 6,000,000 shares outstanding and EPS were $3.20. The firm has a P/E ratio of 10.00(rounded). a. Restate the equity section at year end after the 15 percent stock dividend. Show the new capital accounts. Common stock Retained earnings Net worth b. Restate the EPS and share price after the stock split (Assume the P/E ratio remains constant). (Do not round intermediate calculations. Round the final answers to 2 decimal places.) EPS Share price $
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:c. How many shares would an investor have if he or she originally had 80?
Number of shares
shares
d. What is the investor's total investment worth before and after the stock dividend if the P/E ratio remains constant? (There may be a
slight difference due to rounding.) (Do not round intermediate calculations. Round the After stock dividend answer to 2 decimal
places.)
Before stock dividend
After stock dividend
$
Total
investment
e-1. Assume Mr. Neo, the president of Matrix Corp., wishes to benefit the shareholder by keeping the cash dividend at a previous level
of $1.25 in spite of the fact that the shareholders now have 15 percent more shares. Because the cash dividend is not reduced, the
share price is assumed to remain at $32. What is an investor's total investment worth after the stock dividend if he/she had 80 shares
before the stock dividend?
Total investment
e-2. Under the scenario described in part e-1, is the investor better off?
○ Yes
○ No
f. What is the dividend yield on the shares under the scenario described in part e-1? (Round the final answer to 2 decimal places.)
Dividend yield
%
Transcribed Image Text:Matrix Corp Inc. is considering a 15 percent stock dividend. The capital accounts are as follows:
Common stock (6,000,000 shares)
Retained earnings
Net worth
$60,000,000
75,000,000
$135,000,000
The company's stock is selling for $32 per share. The company had total earnings of $19,200,000 with 6,000,000 shares outstanding
and EPS were $3.20. The firm has a P/E ratio of 10.00(rounded).
a. Restate the equity section at year end after the 15 percent stock dividend. Show the new capital accounts.
Common stock
Retained earnings
Net worth
b. Restate the EPS and share price after the stock split (Assume the P/E ratio remains constant). (Do not round intermediate
calculations. Round the final answers to 2 decimal places.)
EPS
Share price
$
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