nillox has 5,000 shares of stock outstanding th a par value of $1.00 per share and a arket price of $19 per share. The balance eet shows Cash $61,000 Debt $52,500 ther Current Assets $22,500 Common stock ,000 Net Fixed Assets $66,500 Capital in cess of par $60,000 Retained earnings 2,500 Total Assets $150,000 Total Liabilities d Equity $150,000 The firm just announced 10% stock dividend. Required: a) Show the anges in Balance Sheet after the stock vidend b) Show the changes in Balance
nillox has 5,000 shares of stock outstanding th a par value of $1.00 per share and a arket price of $19 per share. The balance eet shows Cash $61,000 Debt $52,500 ther Current Assets $22,500 Common stock ,000 Net Fixed Assets $66,500 Capital in cess of par $60,000 Retained earnings 2,500 Total Assets $150,000 Total Liabilities d Equity $150,000 The firm just announced 10% stock dividend. Required: a) Show the anges in Balance Sheet after the stock vidend b) Show the changes in Balance
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
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Transcribed Image Text:Chillox has 5,000 shares of stock outstanding
with a par value of $1.00 per share and a
market price of $19 per share. The balance
sheet shows Cash $61,000 Debt $52,500
Other Current Assets $22,500 Common stock
$5,000 Net Fixed Assets $66,500 Capital in
excess of par $60,000 Retained earnings
$32,500 Total Assets $150,000 Total Liabilities
and Equity $150,000 The firm just announced
a 10% stock dividend. Required: a) Show the
changes in Balance Sheet after the stock
dividend. b) Show the changes in Balance
Sheet if the firm announces a $3 regular cash
dividend instead of the stock dividend. c) Will
you prefer paying cash dividends or will you
use the cash instead for stock repurchase?
Justify your decision.
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