Effect of Stock SplitWilley's Grill & Restaurant Corporation wholesales ovensand ranges to restaurants throughout the Southwest.Willey's Grill & Restaurant, which had 325,000 shares ofcommon stock outstanding, declared a 3-for-1 stocksplit.a. What will be the number of shares outstanding afterthe split?sharesb. If the common stock had a market price of $450 pershare before the stock split, what would be anapproximate market price per share after the split?per shareLA

Effect of stock split: When the no. of shares are split, no. of shares increases in the ratio of…

Answered: Willey's Grill & Restaurant Corporation…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 15EB: Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the...

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Stock Split Suppose you own 2,000 common shares of Laurence Incorporated. The EPS is $10.00, the DPS is $3.00, and the stock sells for $80 per share. Laurence announces a 2-for-1 split. Immediately after the split, how many shares will you have, what will the adjusted EPS and DPS be, and what would you expect the stock price to be?
Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the stocks market value per share is $30. At that time, there are 10,000 shares of $1 par value common stock outstanding (none held in treasury). What is the new par value of the shares and how many shares are outstanding after the split? What is the total amount of equity before and after the split?
Alert Companys shareholders equity prior to any of the following events is as follows: The company is considering the following alternative items: 1. An 8% stock dividend on the common stock when it is selling for 30 per share. 2. A 30% stock dividend on the common stock when it is selling for 32 per share. 3. A special stock dividend to common shareholders consisting of 1 share of preferred stock for every 100 shares of common stock. The preferred stock and common stock are selling for 123 and 31 per share, respectively. 4. A 2-for-1 stock split on the common stock, reducing the par value to 5 per share (assume the same date for declaration and issuance). The market price is 30 per share on the common stock. 5. A property dividend to common shareholders consisting of 100 bonds issued by West Company. These bonds are carried on the Alert Company books as an available-for sale investment at a fair value of 48,000 (which is also its cost); it has a current value of 54,000. 6. A cash dividend, consisting of a normal dividend and a liquidating dividend, on both the preferred and the common stock. The 10% preferred dividend includes a 2% liquidating dividend, and the 2.30 per share common dividend includes a 0.30 per share liquidating dividend (separate liquidating dividend contra accounts should be used). Required: For each of the preceding alternative items: 1. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. 2. Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income taxes).
According to a company press release, on January 5, 2012, Hansen Natural Corporation changed its name to Monster Beverage Corporation. According to Yahoo Finance, on that day the value of the company stock (symbol: MNST) was $15.64 per share. On January 5, 2018, the stock closed at $63.49 per share. This represents an increase of nearly 306%. A. Discuss the factors that might influence the increase in share price. B. Consider yourself as a potential shareholder. What factors would you consider when deciding whether or not to purchase shares in Monster Beverage Corporation today?
Effect of Stock Split Yeoman Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Yeoman Grill Restaurant Corporation, which had 42,000 shares of common stock outstanding, dedared a 4-for-1 stock split a. What will be the number of shares outstanding after the split? shares b. If the common stock had a market price of $96 per share before the stock split, what would be an approximate market price per share after the split? per share
Effect of Stock Split Yeoman Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Yeoman Grill Restaurant Corporation, which had 33,000 shares of common stock outstanding, declared a 2-for-1 stock split. a. What will be the number of shares outstanding after the split?fill in the blank 1 shares b. If the common stock had a market price of $84 per share before the stock split, what would be an approximate market price per share after the split?$fill in the blank 2 per share
Stock Split Birch Enterprises reported the following information: common stock, $3 par; 750,000 shares authorized; 400,000 shares issued and outstanding. Required: What is the typical effect of a 4-for-1 stock split on the information Birch Enterprises reports above? If the market value of the common stock is $600 per share when the stock split is declared, what would you expect the approximate market value per share to be immediately after the split? Given the information provided above, calculate the effect on each of the following items. If required, round your answers to two decimal places. Authorized shares fill in the blank 1 shares Issued shares fill in the blank 2 shares Market value per share $fill in the blank 3 Par value per share $fill in the blank 4
Mid-State BankCorp recently declared a 7-for-2 stock split. Prior to the split, the stock sold for $100 per share. If the firm's total market value is unchanged by the split, what will the stock price be following the split? Select one: a. $28.57 b. $25.43 c. $26.29 d. $28.86 e. $35.71
Effect of Stock Split Copper Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Copper Grill Restaurant Corporation, which had 21,000 shares of common stock outstanding, declared a 2-for-1 stock split. a. What will be the number of shares outstanding after the split? shares b. If the common stock had a market price of $228 per share before the stock split, what would be an approximate market price per share after the split? per share
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. a. What effect on Mammoth's equity account would result from the stock split? b. What change in stock price would you expect to result from the stock split? Preferred stock Common stock (100,000 shares at $4 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity $ 1,000,000 400,000 1,700,000 10,000,000 $13,100,000 c. What is the maximum cash dividend per share that the firm could pay on common stock before and after the stock split? (Assume that legal capital includes all paid-in capital.) d. Contrast your answers to parts a through c. with the circumstances surrounding a 50% stock dividend. a. If the firm declares a 3-for-2 stock split, the new balance in the common…
The owners' equity accounts for Mars International are shown here: Common stock ($.50 par value) Capital surplus Retained earnings Total owner's equity Please show the equity accounts will change if: a. The company declares a 5-for-1 stock split. How many shares are outstanding now? What is the new par value per share? b. The company declares a 1-for-4 reverse stock split. $20,000 210,000 587,300 $817,300 c. The balance sheet for Mars International is shown below in Market value terms. There are 12,000 shares of stock outstanding. Market Value Balance Sheet Equity $817,300 Cash $ 99,660 Fixed assets 717,640 Total $817,300 Total $817,300 The company has declared a dividend of $1.45 per share. The stock goes ex dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? What will it sell for tomorrow? What will the balance sheet look like after the dividends are paid? d. suppose the company has announced it is going to repurchase $17,400 worth of stock. What effect…
Automotive Supplies Inc’s Stock trades at $50 a share. The company is contemplating a 4-for-3 stock split. Assuming that the stock split will have no effect on the market value of its equity, what will be the company’s stock price following the stock split? Select one: a. $50.00 b. $80.00 c. $75.00 d. $37.50

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