The company with the common equity accounts shown here has decided on a 4-for-1 stock split. The firm's 75-cent-per-share cashdividend on the new (postsplit) shares represents an increase of 10 percent over last year's dividend on the presplit stock.Common stock ($1 par value)Capital surplusRetained earningsTotal owners' equity$ 225,000535,0002,968,500$ 3,728,500a. What is the new par value of the stock?Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.b. What was last year's dividend per share?Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.a. New par valueb. Dividends per share last yearper share

Stock split means to increase the number of the company's outstanding shares and decreases the value…

Answered: The company with the common equity…

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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Assume that a company paid $6 per share to re-purchase 1,100 of its $3 par value common stock. The purchase of this treasury stock: Group of answer choices increased total equity by $6,600 increased total equity by $3,300 decreased total equity by $3,300 decreased total equity by $6,600
se Home Help Stock split versus stock dividend-Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has the stockholders' equity position shown. The current stock price is $120 per share. The most recent period's earnings available for common stock is included in retained earnings. $ 1,000,000 700,000 1,700,000 Preferred stock Common stock (140,000 shares at $5 par) Paid-in capital in excess of par Retained earnings gnments 10,000,000 dy Plan Total stockholders' equity $13,400,000 a. What effect on Mammoth's equity account would result from the stock split? b. What chanqe in stock price would you expect to result from the stock split? ults arson eText a. If the firm declares a 3-for-2 stock split, the new balance in the common stock account after the split is $ (Round to the nearest dollar.) ltimedia Librai nancial Calculat napter Resource Enter vour answer in the answer box and then click Check Answer. ynamic Study Modules 16 parts remaining Clear All Check…
Pettygrove Company had 1,500,000 shares of $10 par value common stock outstanding. The amount of additional paid-in capital is $7,500,000, and Retained Earnings is $2,250,000. The company issues a 2-for-1 stock split. The market price of the stock is $13. What is the balance in the Common Stock account after this issuance? Multiple Choice $30,000,000 $34,500,000 $15,000,000 $22,500,000
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Cash versus stock dividend Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $4.14 per share. Preferred stock Common stock (300,000 shares at $0.93 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity a. Show the effects on the firm of a cash dividend of $0.20 per share. b. Show the effects on the firm of a 1% stock dividend. c. Compare the effects in parts a and b. What are the significant differences between the two methods of paying dividends? a. The balance in preferred stock after the $0.20 cash dividend is $ (Round to the nearest dollar.) $ 99,000 279,000 184,000 390,000 $952,000
Lenore, Inc. declared a cash dividend of $90,000 in 2021 when the following stocks were outstanding: Common stock 30,000 shares, $5 par value $150,000 Preferred stock, 6%, 6,000 shares, $50 par value $300,000 No dividends were declared or paid during the prior two years. Required: Compute the amount of dividends that would be paid to each stockholder group if the preferred stock is noncumulative. Compute the amount of dividends that would be paid to each stockholder group if the preferred stock is cumulative.
Thunder Yard's total stockholders' Equity is P5,600.000, comprised of the following: • P1,000,000 in 8% cumulative preferred stock consisting of shares of P100 par value • P1,800,000 in Ordinary Shares of P5 par value per share issued at P8 • P1,600,000 in additional Paid in capital P1,200,000 in retained earnings There is a Dividend in Arrears for 2 years 1. Compute for Number of shares of Preferred Stock 2. Compute for Additional Paid In Capital: Preferred Stock 3. Book Value Per Share Ordinary Shares (Round-off Answer to two decimal places)
Just prior to the end of the fiscal year, Biofuel Corporation reported the following information: Common stock ($0.20 par value) Additional paid-in capital $ 70,000 2,000,000 900,000 Retained earnings Treasury stock Cash flows from financing activities Required: Complete the table below for each of the three following independent cases: Note: Round "Par per share" answers to 2 decimal places. Case 1: The board of directors declared a cash dividend of $0.02 per share. Case 2: The board of directors declared and issued a 100 percent stock dividend when the stock was selling at $12 per share. Case 3: The board of directors announced 2-for-1 stock split. The market price prior to the split was $20 per share. Items After Stock Dividend Common stock account Par value per share Shares outstanding Additional paid-in capital Retained earnings Total stockholders' equity Cash flows from financing activities Before Any Dividends $ $ $ $ $ 0 24,000 70,000 $ 0.2 2,000,000 900,000 24,000 After Cash…
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Health Systems Inc. is considering a 15 percent stock dividend. The capital accounts are as follows: Common stock (3,500,000 shares at $10 par) $ 35,000,000 Capital in excess of par* 10,000,000 Retained earnings 45,000,000 Net worth $ 90,000,000 *The increase in capital in excess of par as a result of a stock dividend is equal to the shares created times (Market price – Par value). The company’s stock is selling for $28 per share. The company had total earnings of $7,000,000 with 3,500,000 shares outstanding and earnings per share were $2.00. The firm has a P/E ratio of 14. e. Assume Mr. Heart, the president of Health Systems, wishes to benefit stockholders by keeping the cash dividend at a previous level of $1.15 in spite of the fact that the stockholders now have 15 percent more shares. Because the cash dividend is not reduced, the stock price is assumed to remain at $28. What is an investor’s total investment worth after the stock dividend if he/she…
The following is the abstract of the shareholders' equity of Shake Corporation before declaration of cash dividends 12% Preference Share Capital, par P80, 30,000 shares all issued and outstanding P3,000,000 Ordinary Share Capital, par P40, 20,000 shares all issued and outstanding P1,000,000 Retained Earnings 5,500,000 The Board declared dividends of P1,200,000. No dividends were distributed last year. Required: Determine how much dividends the preference and ordinary shares will receive given the following independent situations: d. The Preference share is cumulative and fully participating

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