What effect does the issuance of a 2-for-1 stock split have on each of the following? Par Value per Retained Earnings Share Decrease Decrease No effect No effect Increase No effect Decrease No effect

Q: which statement best describe the key difference between the dividend growth rate and the earning…

A: One of the most important aspects of investing analysis is the valuation of a company. It is the…

Q: When preference share is cumulative, preferred dividends not declared in a period are  a. never paid…

A: Answer: When preference share is cumulative, preferred dividends not declared in a period are…

Q: The date on which we would expect to see the price of a share fall by the value of the dividend is…

A: a. the declaration date - It is the date when the company announces that dividend will be paid on…

Q: If shares have been sold above the nominal value what does this mean and why?

A: Nominal value is the par value or face value of share which is assigned to the share and at which…

Q: CHOICES A. Only Statement I is correct B. Only Statement II is false C. Statements II and III are…

A: The question relates to three statements to be identified as true or false in relation with Long…

Q: Answer this question based on the dividend growth model. If you expect the required rate of return…

A: The required rate of return represents the minimum return an investor will seek for taking on the…

Q: A stock split. Select one: 1. Will have no effect on the par value per share of stock? 2. Will…

A: The question is based on the concept of Share capital.

Q: Which of the following are different approaches for estimating the intrinsic value of a common…

A: There are many different types of valuation of stock of company.

Q: Match each term, 1 through 12 with its impact on the EPS calculation. Assume a simple capital…

A: EPS can be referred to as the per share earnings on the common stock of an entity after the…

Q: While the discounted dividend model values a company’s stock based on its dividends, the corporate…

A: The model that evaluates a firm based on its dividends payout to the investors is known as the…

Q: If the stock makes a dividend payment before the expiration date, then the put-call parity relation…

A: Put call parity equation is used to find the value of call or value of put. Put call parity: Spot…

Q: A decrease in which of the following will increase the current value of a share according to the…

A: Dividend growth model The dividend discount model is a method that helps to calculate the actual…

Q: The stock market valuation/capitalization of a company in the NY Stock Exchange is based on the…

A: Market capitalization or stock market value = no. of shares * market price per share

Q: How does a 2: 1 stock split (stock-split-up) affect the following two items? Par Value per Share…

A: stock split is a decision by a company's board of directors to increase the number of shares that…

Q: Which of the following statements regarding the dividend discount model f computing stock prices…

A: According to the Gordon’s Model, the market value of the share is equal to the present value of…

Q: Identify the effect the declaration of a stock dividend has on total share capital, retained…

A: Total Share Capital:Increase: The total number of shares outstanding increases due to the issuance…

Q: Which of the following is NOT one of the common features between preferred stock and common stock? O…

A: The question is related to Common Stock and preferred stock. In  ase of preferred Stock the paymemts…

Q: The price of the new share after dividends are paid is showing as incorrect?

A: Working Note#1Compute the amount of cash needed to finance the proposed dividend:Cash…

Q: Why is there a cost for retained earnings? Group of answer choices Earnings can be reinvested or…

A: Retained earnings is the amount of net income which remains after the distribution of dividends.

Q: The payout ratio is calculated by dividing Select answer from the options below - (I selected "b")…

A: The ratio is the technique used by the prospective investor or an individual or strategist to read…

Q: All other things being equal, if a company issues a 1% stock dividend, what is the effect on the…

A: Dividends are a source of income for the shareholders of the company. These are paid to both…

Q: Which of the following statements is true? Select one: a. Trailing P/E is based on the current…

A: Price per earnings is a valuation metric used to determine whether the company is under or…

Q: What would you expect to happen to an all-equityfirm’s stock price if its management announceda…

A: Introduction: Recapitalization is a form of corporate rearrangement aimed at improving the financial…

Q: What does it mean when preferred stock has a cumulative feature?

A: Preferred stock is a type of ownership in a company that gives owners the right to fixed dividends…

Q: 8. How would total stockholders' equity be effected by the declaration of each of the following?…

A: Stockholders' equity is the amount of funds raised from the shareholders of the entity. It includes…

Q: What is a stock split? How does a stock split affect the market value of a share of stock? What is a…

A: Company Stock: These are representations of the claim of ownership on the assets and company…

Q: Diluted earnings per share shows dilution resulting from additional shares that may be issued for…

A: 1. Diluted earnings per share - Dilution of shares is the process of issuing additional shares and…

Q: "The dividend discount model is used to find the price of a stock based on the expected dividends…

A: The Dividend Discount model is used to calculate the Price of share considering time value of money.…

Q: the value an investor should assign to a share of stock is dependent on the length of time he or she…

A: Let's understand Dividend Discount model = Dividend discount model is a method that is used to…

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.