Question

Please answer all parts to the question. A,B,C,D,E,F. Thank you!

Stock dividend Investor Personal Finance Problem Security Data Company has outstanding 30,000 shares of common stock currently selling at $39 per share. The firm most recently had earin available for common stockholders of $127.000, but it has decided to retain these funds and is considering a 15% stock dividend in le of a cash dividend a. Determine the firm's current camnings per share. b. Sam Waller currently owns 600 shares of the firm's stock, determine hisproportion of ownership currently and under the proposed 15% stock dividend plan c. Calculate the market price per share under the 15% stock dividend plan. d. For the proposed 15% 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 15% stock dividend plan? 1. 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) Enter your answer in the answer box and then click Check Answer 7 parts Clear All

Answer 1

1. Calculation of Firms earning per share

Given

Total Earning = $127000

Total Common stock outstanding = 30000

Earning per share = 127000/30000 = 4.23 per share

2. Calculation of proportion of ownership of sam

current = 600/30000 = 0.02 = 2%

After 15% stock issue = 690/34500 = 0.02 = 2%