Problem

Regular Dividends The balance sheet for Levy Corp. is shown here in market value terms. Th...

Regular Dividends The balance sheet for Levy Corp. is shown here in market value terms. There are 8,000 shares of stock outstanding.

Market Value Balance Sheet

Caash

$ 30,000

Equity

$380,0000

Fixed assets

350,000

 

 

Total

$380,000

Total

$380,000

The company has declared a dividend of $1.60 per share. The stock goes ex dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? What will it sell for tomorrow? What will the balance sheet look like after the dividends are paid?

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