Homework Answers
(A) Book Value per share = Total Common Shareholder equity / Total outstanding shares
= 11,200,000 / 500,000 = 22.4 $
Earnings per share = Earnings available to common stockholders / Total outstanding shares
= 3,000,000 / 500,000 = 6
Dividends per share:
Retention Ratio = Dividends per share / EPS = 1- Dividend payout ratio
= Dividends per share / 6 = 1 - 45%
Dividends per share = 6*0.55 = 3.3
(B) Post 3:1 stock split, number of outstanding shares will become 1,500,000
Book Value per share = 11,200,000 / 1,500,000 = 7.47
Earnings per share = 3,000,000 / 1,500,000 = 2
Dividends per share = 3.3 / 3 = 1.1
Stock price = 60/3 = 20
Total Market Value of firm shares will remain the same = 1,500,000 * 20 = 30,000,000
(C) Post 15% stock dividend, the total number of outstanding shares = 500,000 * (115%) = 650,000
Book Value per share = 11,200,000 / 650,000 = 17.23
Earnings per share = 3,000,000 / 650,000 = 4.6
Stock price = 60/1.15 = 52.17
(D) Pre - Stock Dividend
Cash dividend paid = 3.3 * 500,000 = 1,650,000
Post Stock Dividend
Cash dividend paid = 3.3/1.15 * 650,000 = 1,650,000
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Question:
Please help!
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at $1 par 364,000 Paid-in capital—excess of par, preferred
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earnings 9,735,000 Treasury stock, at cost; 4,000 common shares
(44,000)Total shareholders' equity$14,156,000
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retained earnings of Consolidated Paper.
Required:
1. Prepare the appropriate...
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