Problem

Stock Dividends The market value balance sheet for Outbox Manufacturing is shown here. Out...

Stock Dividends The market value balance sheet for Outbox Manufacturing is shown here. Outbox has declared a 25 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend). There are 20,000 shares of stock outstanding. What will the ex-dividend price be?

Market Value Balance Sheet

Cash

$230,000

Debt

$190,000

Fixed assets

415,000

Equity

455,000

Total

$645,000

Total

$645,000

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