The company with the common equity accounts shown here has decided on a two-for-one stock split....

The company with the common equity accounts shown here has decided on a two-for-one stock split. The firm’s 37-cent-per-share cash dividend on the new (postsplit) shares represents an increase of 15 percent over last year’s dividend on the presplit stock.

Common stock ($1 par value) $ 470,000

Capital surplus 1,555,000

Retained earnings 3,878,000

Total owners’ equity $ 5,903,000

a. What is the new par value of the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

New par value $______ per share

b. What was last year’s dividend per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Dividends per share last year $_________

Expert Solution

So,

Answer a:- New par value : $ 0.50 per share

Answer b:- Dividend per share last year : $ 0.64 per share

jeff jeffy answered 1 year ago

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