Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years, but is currently contemplating some kind of dividend.
The capital accounts for the firm are as follows:
Common stock (2,300,000 shares at $5 par) $ 11,500,000 Capital in excess of par* 4,000,000 Retained earnings 24,500,000 Net worth $ 40,000,000
*The increase in capital in excess of par as a result of a stock dividend is equal to the new shares created times (Market price ? Par value).
The company
| Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years, but is currently contemplating some kind of dividend. |
| The capital accounts for the firm are as follows: |
| Common stock (2,300,000 shares at $5 par) | $ | 11,500,000 |
| Capital in excess of par* | 4,000,000 | |
| Retained earnings | 24,500,000 | |
| Net worth | $ | 40,000,000 |
| *The increase in capital in excess of par as a result of a stock dividend is equal to the new shares created times (Market price ? Par value). |
| The company |
Related questions
| Health Systems Inc. is considering a 15 percent stock dividend. The capital accounts are as follows: |
| Common stock (4,000,000 shares at $10 par) | $ 40,000,000 | |
| Capital in excess of par* | 15,000,000 | |
| Retained earnings | 45,000,000 | |
| Net worth | $100,000,000 | |
| *The increase in capital in excess of par as a result of a stock dividend is equal to the shares created times (Market price |
| Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years, but is currently contemplating some kind of dividend. |
| The capital accounts for the firm are as follows: |
| Common stock (2,800,000 shares at $10 par) | $ | 28,000,000 |
| Capital in excess of par* | 6,000,000 | |
| Retained earnings | 24,000,000 | |
| Net worth | $ | 58,000,000 |
| *The increase in capital in excess of par as a result of a stock dividend is equal to the new shares created times (Market price â Par value). |
| The companyâs stock is selling for $20 per share. The company had total earnings of $5,600,000 during the year. With 2,800,000 shares outstanding, earnings per share were $2. The firm has a P/E ratio of 10. |
| a. | What adjustments would have to be made to the capital accounts for a 10 percent stock dividend? Show the new capital accounts. (Do not round intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000).) |
| Common stock | $ | |
| Capital in excess of par | ||
| Retained earnings | ||
| Net worth | $ | |
| b. | What adjustments would be made to EPS and the stock price? (Assume the P/E ratio remains constant.)(Do not round intermediate calculations and round your answers to 2 decimal places.) |
| EPS | $ | |
| Stock price | $ | |
| c. | How many shares would an investor end up with if he or she originally had 80 shares? (Do not round intermediate calculations and round your answer to the nearest whole share.) |
| Number of shares |
| d. | What is the investor's total investment worth before and after the stock dividend if the P/E ratio remains constant? (Do not round intermediate calculations and round your answers to the nearest whole dollar.) |
| Total Investment | ||
| Before stock dividend | $ | |
| After stock dividend | $ | |
Dividend policy please help
se common stock currently sells for $20 per share
| Preferred stock | $500,000 |
| Common stock(2,000,000 shares@$1 | 2,000,000 |
| paid in capital in excess of par | 10,000,000 |
| retained earnings | 11,600,000 |
| total stockholders equity | $24,100,000 |
a) what is the maximum dividend per-share se can pay? ( assume capital includes all paid in capital)
b) recast the partial balance sheet(to Stockholders equity accounts) to show independently
1-a 2-for-1 stock split of the common stock
2-a cash dividend of $1.50 per share
3-a stock dividend of 5% on the common stock
c) at what price what you expect se stock to sell after
1-the stock split
2- the stock dividend?
