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Maxwell Electronics had net income of $21 million last year, and had 3 million common shares...

Maxwell Electronics had net income of $21 million last year, and had 3 million common shares outstanding. They declared a 12% stock dividend. Calculate EPS before and after the stock dividend.   
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Answer #1

HI,

Net Income = $21 million

common shares outstanding = 3 million

so EPS before dividend = Net Income/common shares outstanding = 21/3 = $7 per share

then 12% stock dividend has been decided.

and it would be treated same as stock split. because if 12% stock dividend divided that means for each share 0.12 value is paid to shareholder.

That means new number of shares =3*(1+12%) = 3.36 million shares

and Earning per share after dividend = 21/3.36 = $6.25 per share

Thanks

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