Question

In: Finance

. Verbal Communications, Inc., has 14,000 shares of stock outstanding with a par value of $1...

. Verbal Communications, Inc., has 14,000 shares of stock outstanding with a par value of $1 per share and a market value of $46 per share. The firm just announced a 100 percent stock dividend. What is the market value per share after the dividend?

2. Della's Pool Halls has 12,000 shares of stock outstanding with a par value of $1 per share and a market price of $39 a share. The firm just announced a 4-for-3 stock split. How many shares of stock will be outstanding after the split?

3. Alfonzo's Italian House has 25,000 shares of stock outstanding with a par value of $1 per share and a market price of $36 a share. The firm just announced a 5-for-3 stock split. What will the market price per share be after the split?

4. Plyler Cabinets declared a dividend of $1.20 a share on May 15 to holders of record on Monday, June 1. The dividend is payable on June 15. Sara purchased 500 shares of Plyler Cabinets stock on Friday, May 29. How much dividend income will she receive on June 15 from Plyler Cabinets?

Solutions

Expert Solution

Compute the shares outstanding after stock dividend, using the equation as shown below:

Shares outstanding = Shares outstanding before stock dividend*(1 + Dividend percentage)

                                = 14,000 shares*(1 + 1)

                                = 28,000 shares

Hence, the shares outstanding after the stock dividend is 28,000 shares.

Compute the market price per share after the stock dividend, using the equation as shown below:

Market price = (Shares outstanding before stock dividend*Market price)/ Shares outstanding after the stock dividend

                      = (14,000 shares*$46)/ 28,000 shares

                      = $644,000/ 28,000 shares                     

                      = $23 per share

Hence, the market price per share after the stock dividend is $23.

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

Harvery Inc. has 2,000,000 of shares of $1 par value come stock outstanding January 1st On...
Harvery Inc. has 2,000,000 of shares of $1 par value come stock outstanding January 1st On July 1st Harvey repurchased 300,000 shares at a cost of $22 per share December 31, 2015, 300,000 shares were issuable upon exercise of executive stock options- exercise price of $20 per share Average market price of company's stock $30 per share. Harvey Inc has two convertible securities a) Convertible bonds, $2,000,000 Face Value, 7% interest, convertible into 40,000 shares of common stock b) 50,000...
Sheridan Inc. has outstanding 14,500 shares of $10 par value common stock. On July
Sheridan Inc. has outstanding 14,500 shares of $10 par value common stock. On July 1, 2020, Sheridan reacquired 112 shares at $88 per share. On September 1, Sheridan reissued 65 shares at $94 per share. On November 1, Sheridan reissued 47 shares at $86 per share. Prepare Sheridan’s journal entries to record these transactions using the cost method.
York’s outstanding stock consists of 90,000 shares of 7.0% preferred stock with a $5 par value and also 160,000 shares of common stock with a $1 par value
York’s outstanding stock consists of 90,000 shares of 7.0% preferred stock with a $5 par value and also 160,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:     2015 total cash dividends $ 19,800 2016 total cash dividends   29,500 2017 total cash dividends   285,000 2018 total cash dividends   435,000   rev: 11_29_2018_QC_CS-149901 Exercise 11-9 Dividends on common and cumulative...
1. Lott Co. has outstanding 20,000 shares of 8% preferred stock with a $10 par value...
1. Lott Co. has outstanding 20,000 shares of 8% preferred stock with a $10 par value and 100,000 shares of $3 par value common stock. Dividends have been paid every year except last year and the current year. If the preferred stock is cumulative and fully participating and $131,000 is distributed, the common stockholders will receive: Select one: a. $0 b. $51,000 c. $61,000 d. $69,000 e. $85,000 2. What effect will the acquisition of treasury stock have on earnings...
1. Lott Co. has outstanding 20,000 shares of 8% preferred stock with a $10 par value...
1. Lott Co. has outstanding 20,000 shares of 8% preferred stock with a $10 par value and 100,000 shares of $3 par value common stock. Dividends have been paid every year except last year and the current year. If the preferred stock is cumulative and fully participating and $131,000 is distributed, the common stockholders will receive: Select one: a. $0 b. $51,000 c. $61,000 d. $69,000 e. $85,000 2. What effect will the acquisition of treasury stock have on earnings...
A company has 4.3 million shares of common stock outstanding and 85,000 bonds outstanding, par value...
A company has 4.3 million shares of common stock outstanding and 85,000 bonds outstanding, par value of $1,000 each. Each bond has a 6.8 percent annual coupon rate and the bonds have 23 years to maturity and is now selling at $789.23. (Based on the current price, its YTM is 9%) Coupon is paid annually. The common stock currently sells for $58.00 per share and has a beta of 0.90.  The market risk premium is 7 percent and Treasury bills are...
Samuel's has 7,000 shares of stock outstanding with a par value of $1.00 per share and...
Samuel's has 7,000 shares of stock outstanding with a par value of $1.00 per share and a market value of $12 per share. The balance sheet shows $7,000 in the common stock account, $58,000 in the capital in excess of par account and $32,500 in the retained earnings account. The firm just announced a 50% (large) stock dividend. What is the value of the capital in excess of par account after the dividend?
Tere company has 4.3 million shares of common stock outstanding and 85,000 bonds outstanding, par value...
Tere company has 4.3 million shares of common stock outstanding and 85,000 bonds outstanding, par value of $1,000 each. Each bond has a 6.8 percent annual coupon rate and the bonds have 23 years to maturity and is now selling at $789.23. (Based on the current price, its YTM is 9%) Coupon is paid annually. The common stock currently sells for $58.00 per share and has a beta of 0.90. The market risk premium is 7 percent and Treasury bills...
Carington Corp. has outstanding 10 million shares of $2 par value common stock and 1 million...
Carington Corp. has outstanding 10 million shares of $2 par value common stock and 1 million shares of 7% $4 par value preferred stock. The company declares total dividends amounting to $50,000, $250,000, and $600,000 during 2017,2018, and 2019, respectively. Calculate the amount of dividends to be distributed to preferred and common shareholders under each of the two following scenarios: A) The preferred stock is noncumulative B) The preferred sock is cumulative
46. A corporation sold 14,000 shares of its $10 par value common stock at a cash...
46. A corporation sold 14,000 shares of its $10 par value common stock at a cash price of $13 per share. The entry to record this transaction would include: a credit to Common Stock for $140,000   a debit to Paid-in-Capital in Excess of Par Value, for $42,000   a credit to Common Stock for $182,000 a debit to cash for $140,000 47. An internal control system is designed to ensure reliable accounting all choices are correct promote efficient operations protect assets...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT