The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $2.25 per share,...
| The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $2.25 per share, and there are 50,000 shares of stock outstanding. The market-value balance sheet for Payout is shown below. |
| Assets | Liabilities and Equity | ||
| Cash | $450,000 | Equity | $1,650,000 |
| Fixed assets | 1,200,000 | ||
| a. | What price is Payout stock selling for today? (Round your answer to the nearest cent.) |
| Price $ |
| b. | What price will it sell for tomorrow? Ignore taxes. (Round your answer to 2 decimal places.) |
| Price $ |
Homework Answers
a: Price of stocks today = Market value of equity/ Number of shares + dividend
= 1650,000/ 50000 + 2.25
= $33+ 2.25
= $ 35.25
b: Price of stocks tomorrow = 35.25 - 2.25 = $33
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