Question

The market value balance sheet for Vena Sera Manufacturing is shown here. Vena Sera has declared...

The market value balance sheet for Vena Sera Manufacturing is shown here. Vena Sera has declared a 25 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend). There are 17,000 shares of stock outstanding.

Market Value Balance Sheet
  Cash $207,000   Debt $189,000
  Fixed assets 356,000   Equity 374,000
     Total

$563,000

     Total

$563,000

Required:
(a) What is the stock price today?
(b) What will the ex-dividend price be?

Homework Answers

Answer #1

(a)-Stock price today

Stock price today = Total Market Value of Equity / Number of common shares outstanding

= $374,000 / 17,000 Shares

= $22.00 per share

(b)-Ex-dividend price

The new number of common shares outstanding after Sera has declared a 25 percent stock dividend = Number of common shares outstanding x 125%

= 17,000 Shares x 125%

= 21,250 Shares

Therefore, the Ex-dividend price = Total Market Value of Equity / Number of common shares outstanding

= $374,000 / 21,250 Shares

= $17.60 per share

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The market value balance sheet for Oracle Manufacturing is shown here. The company has declared a...
The market value balance sheet for Oracle Manufacturing is shown here. The company has declared a stock dividend of 10 percent. The stock goes ex-dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend). Market Value Balance Sheet Cash $ 96,000 Debt $ 155,000 Fixed assets 800,000 Equity 741,000 Total $ 896,000 Total $ 896,000 There are 31,000 shares of stock outstanding. What is the current share price? What will the ex-dividend price be?
The market value balance sheet for Briggs Manufacturing is shown here. The company has declared a...
The market value balance sheet for Briggs Manufacturing is shown here. The company has declared a 30 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend). There are 20,000 shares of stock outstanding. Market Value Balance Sheet Cash $ 141,000 Debt $ 291,000   Fixed assets 750,000   Equity 600,000       Total $ 891,000       Total $ 891,000    What will the ex-dividend price be? (Do not round intermediate calculations...
The market value balance sheet for Bobaflex Manufacturing is shown here. The company has declared a...
The market value balance sheet for Bobaflex Manufacturing is shown here. The company has declared a 25 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend).    Market Value Balance Sheet   Cash $ 99,000   Debt $ 158,000   Fixed assets 830,000   Equity 771,000      Total $ 929,000      Total $ 929,000    a. There are 34,000 shares of stock outstanding. What is the current share price? (Do not round...
The market value balance sheet for Bobaflex Manufacturing is shown here. The company has declared a...
The market value balance sheet for Bobaflex Manufacturing is shown here. The company has declared a 10 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend). Market Value Balance Sheet Cash $ 86,000 Debt $ 145,000 Fixed assets 700,000 Equity 641,000 Total $ 786,000 Total $ 786,000 a. There are 21,000 shares of stock outstanding. What is the current share price? (Do not round intermediate calculations...
The market value balance sheet for Globe Manufacturing is shown here. There are 15,000 shares of...
The market value balance sheet for Globe Manufacturing is shown here. There are 15,000 shares of stock outstanding. The company has declared a 20 percent stock dividend. The stock goes ex dividend tomorrow. What will the new stock price be? Market value balance sheet Cash $80,000 Debt $100,000 Fixed Assets 570,000 Equity 550,000 Total $650,000 Total $650,000 Group of answer choices $25.46 $30.56 $33.05 $38.24 None of the above is correct.
The balance sheet for Cherry Pie Corp. is shown here in market value terms. There are...
The balance sheet for Cherry Pie Corp. is shown here in market value terms. There are 5,000 share of stock outstanding. Market Value Balance Sheet Cash $20,000 Equity $175,000 Fixed Assets 155,000 Total $175,000 Total $175,000 a. The company has declared a dividend of $1.5 per share. The stock goes ex-dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? What will the ex-dividend price be? b. Suppose Cherry Pie has announced it is going to repurchase...
The balance sheet for Ferguson Corp. is shown here in market value terms. There are 6,000...
The balance sheet for Ferguson Corp. is shown here in market value terms. There are 6,000 shares of stock outstanding.    Market Value Balance Sheet   Cash $ 44,900   Equity $ 474,900   Fixed assets 430,000      Total $ 474,900      Total $ 474,900    The company has declared a dividend of $1.80 per share. The stock goes ex dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? (Do not round intermediate calculations. Round your answer to 2 decimal places,...
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,...
The balance sheet for Fourth Corp. is shown here in market value terms. There are 5,000...
The balance sheet for Fourth Corp. is shown here in market value terms. There are 5,000 shares of stock outstanding.    Market Value Balance Sheet   Cash $ 43,800   Equity $ 363,800   Fixed assets 320,000      Total $ 363,800      Total $ 363,800    The company has declared a dividend of $1.50 per share. The stock goes ex-dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? (Do not round intermediate calculations and round your answer to 2 decimal places,...
The balance sheet for Fourth Corp. is shown here in market value terms. There are 5,000...
The balance sheet for Fourth Corp. is shown here in market value terms. There are 5,000 shares of stock outstanding.    Market Value Balance Sheet   Cash $ 44,300   Equity $ 414,300   Fixed assets 370,000      Total $ 414,300      Total $ 414,300    The company has declared a dividend of $2.00 per share. The stock goes ex-dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? (Do not round intermediate calculations and round your answer to 2 decimal places,...