The statement of financial position, from a market value, is shown below for AAA Corporation. AAA...

The statement of financial position, from a market value, is shown below for AAA Corporation. AAA has declared a 25% stock dividend. The stock goes ex dividend tomorrow. There are currently 13,000 shares of stock outstanding. What will the ex-dividend price be?

Market Value Statement of Financial Position
Cash	$83,000	Debt	$121,000
Fixed Assets	575,000	Equity	537,000
Total	$658,000	Total	$658,000

Solutions

Expert Solution

Calculation of the ex-dividend price of a share:

i) Total shares to be alloted in stock dividend

= 13,000 x 25%

= 3,250 shares

iii) Total shares after stock dividend = 13,000 +3,250

= 16,250

iii) Ex-dividend price = Total equity / Total shares after stock dividend

= $537,000 / 16,250 shares

= $33.05 per share (Answer)

jeff jeffy answered 2 years ago

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