The howe company's stock holder's equity account follows: Common stock (400,000 shares at $4 par $1,600,000 paid-in capital in excess of par 1,000,000 Retained earnings 1900000 totall stockholder's equity $4,500,000 The earnings available for common stockholders from this period’s operations are $100,000, which have been included as part of the $1.9 million retained earnings. a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid- in capital.) b. If the firm has $160,000 in cash, what is the largest per-share dividend it can pay without borrowing? c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a and b.
The howe company's stock holder's equity account follows:
Common stock (400,000 shares at $4 par $1,600,000
paid-in capital in excess of par 1,000,000
totall
The earnings available for common stockholders from this period’s operations are $100,000, which have been
included as part of the $1.9 million retained earnings.
a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid-
in capital.)
b. If the firm has $160,000 in cash, what is the largest per-share dividend it can pay without borrowing?
c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a
and b.
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