EXERCISE 12.2 Stock Dividends and Stock SplitsLO12-4Assume that when you were in high school you saved $1,000 to invest for your college education. You purchased 200 shares of SmileyIncorporated, a small but growing company. Over the three years that you have owned the stock, the corporation's board of directors hastaken the following actions.1. Declared a 2-for-1 stock split.2. Declared a 20 percent stock dividend.3. Declared a 3-for-1 stock split.The current price of the stock is $12 per share.a. Calculate the current number of shares and the market value of your investment.b. Explain the likely reason the board of directors of the company has not declared a cash dividend.c. State your opinion as to whether or not you would have been better off if the board of directors had declared a cash dividend instead ofthe stock dividend and stock splits.

Stock dividend: Stock dividend is the dividend paid by the company to its shareholders in form of…

Answered: Assume that when you were in high…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4: Preparing And Using Financial Statements

Section: Chapter Questions

Problem 1EP

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Question 8 Your Corporation had 50,000 shares of $3 par value common stock authorized, 30,000 shares issued and 20,000 shares outstanding, when the board of directors declared a cash dividend of $1.50 per share. What is the dollar amount of the cash dividend? $90,000 $45,000 $30,000 $28,000 $60,000
Question 5 Nike was organized in November 1971 by Bill Bowerman and Phil Knight It has shares 76,000 shares of $106 par value, 6%, nonparticipating preferred stock outstanding and 24,000 shares of $68 par value common stock outstanding. It has declared and paid cash dividends each year as shown below. Calculate the total dividends distributed to each class of stockholder under each of the assumptions given. Year 1971 1976 1982 Totals Dividends Paid 5,200 8,400 23,000 NOT Cumulative Common Preferred 5200 2 0 Preferred 5200 Cumulative Common 0
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Problem 10-1 Recording Dividends On August 15, 2021, EasyMoney, Inc.’s Board of Directors meets and declares that EasyMoney will pay a dividend to its stockholders. Each share of EasyMoney's Common Stock will be paid a dividend of $1.25 per share. There are currently 100,000 shares of EasyMoney's Common Stock held by EasyMoney’s shareholders. The following are the facts related to this dividend:  Dividend per Share .................... $1.25  Date of Declaration .................... August 15, 2021  Date of Record ........................... September 5, 2021  Date of Payment ........................ September 20, 2021 The following is a partial list of the accounts in EasyMoney, Inc.’s General Ledger. These are the only accounts you need for this problem.  Cash  Dividends Payable  Retained Earnings As of August 1, 2021, the Beginning Balance in the Dividends Payable account is $0 and the Beginning Balance in the Retained Earnings account is $625,000. Use the forms in the Excel…
QUESTION 3 Huxley Company has 239699 shares of common stock authorized, 190997 issued, and 57975 shares of treasury stock. The company's board of directors declares a dividend of $0.46 per share of common stock. What is the total amount of the dividend that will be paid? Round your answer to the nearest dollar
Chapter 12 Homework еBook Print Item Instructions Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows: Jan. 8 Split the common stock 2 for 1 and reduced the par from $100 to $50 per share. After the split, there were 300,000 common shares outstanding. Apг. 30 Declared semiannual dividends of $0.60 per share on 16,000 shares of preferred stock and $0.22 per share on the common stock payable on July 1. Jul. 1 Paid the cash dividends. Oct. 31 Declared semiannual dividends of $0.60 per share on the preferred stock and $0.11 per share on the common stock (before the stock dividend). In addition, a 5% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $56. Dec. 31 Paid the cash dividends and issued the certificates for the common stock dividend. Journalize the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of…
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Problem 5 The owners' equity accounts for Alexander International are shown here: $ 40,000 335,000 Common stock ($0.50 par value) Capital surplus Retained earnings Total owners' equity 738,120 $1,113,120 a If Alexander stock currently sells for $25 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
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Question 6 Jenny bought a share of Athrax Company for $65 one year ago. The stock paid a dividend of $2.52 per quarter throughout the year and dividends are expected to increase by 3% next year. If the stock is selling today for $87.10, the expected dividend yield is closest to which of the following? 34.0% 11.6% 15.5% 11.9% 49.5%
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