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Question 1 Dividend Policy The following represents the stockholder's equity account of Security Data Company: R Preferred stock Common stock (R4 par) Paid-in capital in excess of par Retained earnings Total stockholder's equity Additional information provided: Current share price Earning Available to Common Shareholders (EACS) The firm is considering a 5% stock dividend. Preferred stock Common stock (R4 par) Paid-in capital in excess of par Retained earnings Total stockholder's equity A Rework the stockholder's equity account for Security Data Company should the firm decide to implement the stock dividend. Current New R200,000 R200,000 R350,000 R350,000 R1,100,000 par value Current Price Shares outstanding Earning Available to Common Shareholders (EACS) stock dividend Increase in shares Total dividend value R200,000 R200,000 R350,000 R350,000 R1,100,000 New price Current EPS New EPS R40 R120,000 R4 R40 R120,000 0.05 B. Determine the current earnings per share (EPS) and the new EPS if the stock dividend is implemented.

Question 1 Dividend Policy The following represents the stockholder's equity account of Security Data Company: R Preferred stock Common stock (R4 par) Paid-in capital in excess of par Retained earnings Total stockholder's equity Additional information provided: Current share price Earning Available to Common Shareholders (EACS) The firm is considering a 5% stock dividend. Preferred stock Common stock (R4 par) Paid-in capital in excess of par Retained earnings Total stockholder's equity A Rework the stockholder's equity account for Security Data Company should the firm decide to implement the stock dividend. Current New R200,000 R200,000 R350,000 R350,000 R1,100,000 par value Current Price Shares outstanding Earning Available to Common Shareholders (EACS) stock dividend Increase in shares Total dividend value R200,000 R200,000 R350,000 R350,000 R1,100,000 New price Current EPS New EPS R40 R120,000 R4 R40 R120,000 0.05 B. Determine the current earnings per share (EPS) and the new EPS if the stock dividend is implemented.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 1 Dividend Policy The following represents the stockholder's equity account of Security Data Company: R Preferred stock Common stock (R4 par) Paid-in capital in excess of par Retained earnings Total stockholder's equity Additional information provided: Current share price Earning Available to Common Shareholders (EACS) The firm is considering a 5% stock dividend. Preferred stock Common stock (R4 par) Paid-in capital in excess of par Retained earnings Total stockholder's equity A. Rework the stockholder's equity account for Security Data Company should the firm decide to implement the stock dividend. New Current R200,000 R200,000 R350,000 par value Current Price Shares outstanding Earning Available to Common Shareholders (EACS) stock dividend Increase in shares Total dividend value R200,000 R200,000 R350,000 R350,000 R1,100,000 R40 R120,000 New price Current EPS New EPS R350,000 R1,100,000 R4 R40 R120,000 0.05 B. Determine the current earnings per share (EPS) and the new EPS if the stock dividend is implemented.
Transcribed Image Text:Question 1 Dividend Policy The following represents the stockholder's equity account of Security Data Company: R Preferred stock Common stock (R4 par) Paid-in capital in excess of par Retained earnings Total stockholder's equity Additional information provided: Current share price Earning Available to Common Shareholders (EACS) The firm is considering a 5% stock dividend. Preferred stock Common stock (R4 par) Paid-in capital in excess of par Retained earnings Total stockholder's equity A. Rework the stockholder's equity account for Security Data Company should the firm decide to implement the stock dividend. New Current R200,000 R200,000 R350,000 par value Current Price Shares outstanding Earning Available to Common Shareholders (EACS) stock dividend Increase in shares Total dividend value R200,000 R200,000 R350,000 R350,000 R1,100,000 R40 R120,000 New price Current EPS New EPS R350,000 R1,100,000 R4 R40 R120,000 0.05 B. Determine the current earnings per share (EPS) and the new EPS if the stock dividend is implemented.
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