Question

Stock dividend Investor Personal Finance Problem Security Data Company has outstanding 30,000 shares of common stock currently selling at 544 per share. The firm most recently had earnings available for common stockholders of $126,000, but it has decided to retain these funds and is considering a 10% stock dividend in lieu of a cash dividend a. Determine the firm's current eamings per share b. If Sam Waller currently owns 700 shares of the firm's stock, determine his proportion of ownership currently and under the proposed 10% stock dividend plan c. Calculate the market price per share under the 10% stock dividend plan. d. For the proposed 10% stock dividend plan, calculate the earnings per share after payment of the stock dividend e. What is the value of Sam's holdings under the 10% stock dividend plan? Should Sam have any preference with respect to the proposed stock dividend? a. The firm's current earnings per share is $ (Round to the nearest cent) b. If Sam currently owns 700 shares of the firm's stock, the proportion of the firm Sam currently owns is %. (Round to two decimal places The proportion of the firm Sam will own after the 10% stock dividend is (Round to two decimal places C. 1 Security pays a 10% stock dividend the market price of stock after the dividend is 5 (Round to its nearest cent) d. The firm's earnings per share after payment of the stock dividend is (Round to the nearest cent) e. The value of Sam's holdings before the stock dividend is 5 (Round to the nearest dollar The value of Sam's holdings after the stock dividend is (Round to the nearest dollar) Click to select your answer(s)

Answer 1

Attach is the explanation for all answers in subparts-

a. EPS $4.20

b. Ownership 2.33% pre and post stock dividend

c. MPS $40

d. New EPS post stock dividend $3.82

eJAsSMAte Date Page No ep shares Narket Price Net Eamings Stock Dividend 30,600 41 $126,000 ax Pen shase Earnings Net Sncome No. shaes 126,000 3000 0 4.20 Sam onthesship Joo shares G000000 Shares 2.33% 700 t 107.9700 1 Stock dividend Attes 770 % of ouneaship 33000 2.32% $ 1,3 2090o 44 20000 K C 1otal shase vale No.6A Share atter div. 10/ 2 30000 t 3OD0 Maskat fa ca Per shae 33000 329000 33000 Net Sncome Pes shase a Newo arrming Neus no shaues A4126,000 33000 $3.$2