Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
11th Edition
ISBN: 9780077861759
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 19, Problem 2QP
Stock Dividends The owners’ equity accounts for Hexagon International are shown here:
| Common stock ($1 par value) | $ 40,000 |
| Capital surplus | 155,000 |
| 538,400 | |
| Total owners' equity | $733,400 |
- a. If the company’s stock currently sells for $39 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
- b. If the company declared a 25 percent stock dividend, how would the accounts change?
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The owners’ equity accounts for Vulcano International are shown below.a. If the company’s stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.b. If the company declared a 25 percent stock dividend, how would the accounts change?
Input Area:
Common stock
$20,000
Par value
$0.50
Capital surplus
$210,000
Retained earnings
$587,300
Total owners' equity
$817,300
Stock price
$42
Stock dividend
10%
Stock dividend
25%
(Use cells A6 to B13 from the given information to complete this question.)
Output Area:
New shares outstanding
New shares issued
-
Capital surplus on new shares
Common stock
Capital surplus
Retained earnings
Total owners' equity
New shares…
1. The owners' equity accounts for Investo Unlimited are shown here:
Common stock ($.75 par value)
Capital surplus
Retained earnings
Total owners' equity
$50,000
$215,000
$642,700
$907,700
a.
b.
How many new shares will be distributed if the company's stock currently sells
for $50 per share and a 15 percent stock dividend is declared? Show how the
equity accounts would change.
How would the accounts change if the company declared a 35 percent stock
dividend?
The owner equity accounts for Masterson International are shown here
Common stock (of $1 par value)- $45,000
Capital surplus- -$157,000
Retained earnings- $603,000
Total owners’ equity- $805,000
If the company’s stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
Chapter 19 Solutions
Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 19 - Dividend Policy Irrelevance How is it possible...Ch. 19 - Stock Repurchases What is the impact of a stock...Ch. 19 - Dividend Policy It is sometimes suggested that...Ch. 19 - Dividend Chronology On Tuesday, December 8,...Ch. 19 - Prob. 5CQCh. 19 - Prob. 6CQCh. 19 - Dividends and Stock Price Last month, Central...Ch. 19 - Prob. 8CQCh. 19 - Dividend Policy For initial public offerings of...Ch. 19 - Investment and Dividends The Phew Charitable Trust...
Ch. 19 - Use the following information to answer the next...Ch. 19 - Stock Repurchases How do you think this tax law...Ch. 19 - Dividends and Stock Value The growing perpetuity...Ch. 19 - Bird-in-the-Hand Argument The bird-in-the-hand...Ch. 19 - Dividends and Income Preference The desire for...Ch. 19 - Dividends and Clientele Cap Henderson owns Neotech...Ch. 19 - Prob. 17CQCh. 19 - Prob. 18CQCh. 19 - Prob. 19CQCh. 19 - Prob. 20CQCh. 19 - Prob. 1QPCh. 19 - Stock Dividends The owners equity accounts for...Ch. 19 - Prob. 3QPCh. 19 - Stock Splits and Stock Dividends Roll Corporation...Ch. 19 - Prob. 5QPCh. 19 - Share Repurchase In the previous problem, suppose...Ch. 19 - Prob. 7QPCh. 19 - Prob. 8QPCh. 19 - Prob. 9QPCh. 19 - Prob. 10QPCh. 19 - Prob. 11QPCh. 19 - Prob. 12QPCh. 19 - Stock Repurchase Flychucker Corporation is...Ch. 19 - Prob. 14QPCh. 19 - Prob. 15QPCh. 19 - Prob. 16QPCh. 19 - Prob. 17QPCh. 19 - Prob. 18QPCh. 19 - Prob. 19QPCh. 19 - Prob. 20QPCh. 19 - Prob. 1MCCh. 19 - Jessica believes that the company should use the...Ch. 19 - Prob. 3MCCh. 19 - Another option discussed by Tom, Jessica, and...Ch. 19 - Prob. 5MCCh. 19 - Does the question of whether the company should...
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