nds109
Jun 9, 2009, 07:36 PM
The firm's current earnings are $250,000 so eps are $2.50. The firm's current balance sheet is:
Cash $800,000 Dividends payable
Common Stock(100,000 share, $1) 100,000
APIC 400,000
RE 300,000
a. assume the firm's board of directors declares a $0.25 cash dividend.
i.) What will be the effect on the balance sheet from the cash dividend?
ii.) What will be the effect on earnings per share?
b. assume the firm instead used 10% stock dividend.
i) what would be hte effect on the balance sheet if the firm used a 10% stock dividend instead? the current stock price is $5 per share.
Cash $800,000 Dividends payable
Common Stock(100,000 share, $1) 100,000
APIC 400,000
RE 300,000
a. assume the firm's board of directors declares a $0.25 cash dividend.
i.) What will be the effect on the balance sheet from the cash dividend?
ii.) What will be the effect on earnings per share?
b. assume the firm instead used 10% stock dividend.
i) what would be hte effect on the balance sheet if the firm used a 10% stock dividend instead? the current stock price is $5 per share.