Question

# The balance sheet for Throwing Copper, Inc., is shown here in market value terms. There are...

The balance sheet for Throwing Copper, Inc., is shown here in market value terms. There are 34,000 shares of stock outstanding.

 Market Value Balance Sheet Cash \$ 163,000 Fixed assets 678,500 Equity \$ 841,500 Total \$ 841,500 Total \$ 841,500

The company has declared a dividend of \$1.10 per share. The stock goes ex dividend tomorrow. Ignore all tax effects.

What is the stock selling for today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Stock price            \$

What will it sell for tomorrow? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Stock price            \$

What will the balance sheet look like after the dividends are paid? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

 Cash \$ Fixed assets Equity \$ Total \$ Total \$

Ans. Calculation of stock price before Ex- dividend

Step 1: Calculation of Net Assets value

Total Net assets = 841500

Total no share = 34000

Share price today (841500/34000) = 24.75

2. Calculation of share after dividend declare and paid

Total Net assets value before dividend = 841500

Less: (34000X1.10) = (37400)

Net assets after dividend paid = 804100

Share price after ex-dividend = 804100/34000 = \$23.65

3. Balance Sheet after the dividend is paid

Cash (163000-37400) \$ 125600 Equity (841500-37400) \$ 804100

Fixed Assets \$ 678500

\$ 804100 \$ 804100