Question
1) Bill issued 200,000 shares of $2 par value stock. The book value of Bills common stockholders' equity is equal to $20 million. On August
1) Bill issued 200,000 shares of $2 par value stock. The book value of Bills common stockholders' equity is equal to $20 million. On August 1, he implements a two-for-one stock split. After the stock split, the total number of shares outstanding is 400000 shares, the total par value is $1 and the total book value is $20 million.
Assuming the market price per share of Bills stock was $150/share before the split, what should be the market price per share after the split?
2)On July 15, 2015, Tina declared and issued a 15 percent stock dividend. Prior to this dividend, Tina had 50,000 shares of $10 par value common stock issued and outstanding. The market value of Tinas common stock on July 15, 2015, was $23 per share. As a result of this stock dividend, by what amount would Tinas total stockholders' equity increase or decrease?
3) For the year, Gamma had net income of $750, interest expense of $150, and a Times Interest Earned Ratio of 18. What was Gammas income before taxes for the year?
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