Question

​(Stock dividends​) In the spring of​ 2016, the CFO of HTPL Distributing Company decided to distribute...

​(Stock dividends​)

In the spring of​ 2016, the CFO of HTPL Distributing Company decided to distribute a stock dividend to its shareholders.​ Specifically, the CFO proposed that the company pay 0.05 shares of stock to the holders of each share of common stock such that the holder of​ 1,000 shares of stock would receive an additional 50 shares of common stock.

a. If the firm had total net income for the year of $12,000,000 and had 22,000,000 shares of common stock outstanding before the stock​ dividend, what was the​ firm's earnings per​ share?

b. After paying the stock​ dividend, what was the​ firm's earnings per​ share?

c. If you owned​ 1,000 shares of stock before the stock​ dividend, how many dollars of earnings did the firm earn from your​ 1,000-share investment? After the stock dividend was​ paid, how many dollars of earnings did the firm earn on your larger share​ holdings? What effect would you expect from the payment of the stock dividend on your total investment in the​ firm?

a. Before the stock​ dividend, what was the​ firm's earnings per​ share?

​$ ​(Round to four decimal​ places.)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
​(Stock dividends​) In the spring of​ 2016, the CFO of HTPL Distributing Company decided to distribute...
​(Stock dividends​) In the spring of​ 2016, the CFO of HTPL Distributing Company decided to distribute a stock dividend to its shareholders.​ Specifically, the CFO proposed that the company pay 0.05 shares of stock to the holders of each share of common stock such that the holder of​ 1,000 shares of stock would receive an additional 50 shares of common stock. a. If the firm had total net income for the year of $10,000,000 and had 20,000,000 shares of common...
The AES Corporation has $ 6,593,000 to distribute its dividends and did not distribute dividends the...
The AES Corporation has $ 6,593,000 to distribute its dividends and did not distribute dividends the previous year. There are 96,000 shares of cumulative preferred stock that earn dividends at​ $0.68 per share and 200,000 shares of common stock. How much money goes to preferred​ stockholders?
10- ZIP Company owns 37,000 shares of the common stock of PIK Company. ZIP decided to...
10- ZIP Company owns 37,000 shares of the common stock of PIK Company. ZIP decided to divest itself of this investment by distributing the PIK shares in the form of a property dividend. The dividend ratio is one share of PIK for every four shares of ZIP common held by shareholders. ZIP has 148,000 common shares outstanding. On April 15, 2018, the date of declaration, PIK stock had a par of $5 per share, a book value of $11.7 per...
Final earnings estimates for the Smithfield Meat Packing Company have been prepared for the CFO of...
Final earnings estimates for the Smithfield Meat Packing Company have been prepared for the CFO of the company and are shown in the following table. The firm has 4,000,000 shares of common stock outstanding. As assistant to the CFO, you are asked to determine the yearly dividend per share to be paid depending on the following possible policies: a. A stable dollar dividend targeted at 30 percent of earnings over a 5-year period. b. A small, regular dividend of $0.60...
Calculation of EPS and retained earnings  Everdeen Mining​, ​Inc., ended 2019 with net profits before taxes...
Calculation of EPS and retained earnings  Everdeen Mining​, ​Inc., ended 2019 with net profits before taxes of $ 436 comma 000$436,000. The company is subject to a 21 %21% tax rate and must pay $ 64 comma 000$64,000 in preferred stock dividends before distributing any earnings on the 170 comma 000170,000 shares of common stock currently outstanding. a. Calculate​ Everdeen's 2019 earnings per share​ (EPS). b. If the firm paid common stock dividends of $ 0.80$0.80 per​ share, how many...
Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in...
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 (3,000,000 shares at $5 par) $ 15,000,000 Capital in excess of par* 4,000,000 Retained earnings 24,000,000 Net worth $ 43,000,000 *The increase in capital in excess of par as a result of a stock dividend is equal to the new shares created times...
Problem 18-18 Stock dividend and its effect [LO18-4] Ace Products sells marked playing cards to blackjack...
Problem 18-18 Stock dividend and its effect [LO18-4] 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 (3,000,000 shares at $5 par) $ 15,000,000 Capital in excess of par* 4,000,000 Retained earnings 24,000,000 Net worth $ 43,000,000 *The increase in capital in excess of par as a result of a stock dividend...
you are the CFO of the Imaginary Products Co. the company provides the following information about...
you are the CFO of the Imaginary Products Co. the company provides the following information about its capital structure: Debt: the firm has 200,00 bonds outstanding with a pair value of $1,000, pays 9 percent interest (semi- annual coupon payments), have a maturity of 15 years and have a quoted price of 137.55 per bond. preferred shares: the firm also has an issue of 2 million preferred shares outstanding with a market price of $12.00 per share. the preferred shares...
Curro Holdings Ltd has a target capital structure that calls for 25% debt, 25% preferred stock,...
Curro Holdings Ltd has a target capital structure that calls for 25% debt, 25% preferred stock, 50% common equity. The firm's before-tax cost of debt is 8.34%, the tax rate 40% and it can sell as much debt as it wishes at this rate. The firm's prefered stock currently sells for R80 per share and pays a perpetual dividend of R2.9. The firm will, however only net R68 per share from the sale of new preferred stock. It's common share...
you are the CFO of the Imaginary Products Co. the company provides the following information about...
you are the CFO of the Imaginary Products Co. the company provides the following information about its capital structure: Debt: the firm has 200,00 bonds outstanding with a pair value of $1,000, pays 9 percent interest (semi- annual coupon payments), have a maturity of 15 years and have a quoted price of 137.55 per bond. preferred shares: the firm also has an issue of 2 million preferred shares outstanding with a market price of $12.00 per share. the preferred shares...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT