Question

Use the following information to answer the questions below. Market Value Statement of Financial Position Cash...

Use the following information to answer the questions below.
Market Value Statement of Financial Position
Cash $    50,000 Dividends Payable $           -  
Fixed Assets $ 350,000 Equity $ 400,000
Total $ 400,000 Total $ 400,000
Total number of common shares outstanding: 10,000
Dividend per share: $        2.00
What is the current market price per share?
Prepare the Market Value Statement of Financial Position once the dividends have been declared, but not yet paid.
Ignoring tax effects, what will be the market price per share tomorrow, if the stock goes ex-dividend tomorrow?
Prepare the Market Value Statement of Financial Position once the dividends have been paid.

Homework Answers

Answer #1

1. Current Market Price Per Share = Total Equity / Stock O/s = $400000 / 10000 = $40

2. Market Value Statement once dividends declared but not yet paid

3. Ex-Dividend Market Price of Share = Total Equity after Dividend / Stock O/s = $380000 / 10000 = $38

4. Market Value Statement of Financial Position once the dividends have been paid

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