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Murphy's, Inc., has 32,450 shares of stock outstanding with a par value of $1 per share....

Murphy's, Inc., has 32,450 shares of stock outstanding with a par value of $1 per share. The market value is $10 per share. The balance sheet shows $88,850 in the capital in excess of par account, $32,450 in the common stock account, and $157,950 in the retained earnings account. The firm just announced a stock dividend of 12 percent. What will the market price per share be after the dividend?

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Answer #1

Market price per share = (32,450 shares × $10) / (32,450 shares × 1.12) = $8.93

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