1. West Wind, Inc. has 5,000,000 shares of common stock outstanding with a market value of $70 per share. Net income for the coming year is expected to be $6,700,000. What impact will a two-for-one stock split have on the earnings per share and on the price of the stock? Round the earnings per share to the nearest cent and the prices of the stock to the nearest dollar.

EPS before the split: $ EPS after the split: $

Price of the stock before the split: $ per share Price of the stock after the split: $ per share

2. Sharon Bohnette owns 900 shares of Northern Chime Company. There are five seats on the board of directors up for election and Ms. Bohnette is one of the nominees. Under the traditional method of voting, how many votes may she cast for herself? Round your answer to the nearest whole number.

votes

How many votes may she cast for herself under the cumulative method of voting? Round your answer to the nearest whole number.

votes

3. Jersey Medical earns $12.00 a share, sells for $90, and pays a $3 per share dividend. The stock is split three for one and a $1 per share cash dividend is declared.

1. What will be the new price of the stock? Round your answer to the nearest dollar.

   $

2. If the firm's total earnings do not change, what is the payout ratio before and after the stock split? Round your answers to one decimal place.

   Payout ratio before the split: %

   Payout ratio after the split: %

4. Firm A had the following selected items on its balance sheet:

Cash	$	32,000,000
Common stock ($40 par; 2,500,000 shares outstanding)		100,000,000
Additional paid-in capital		15,000,000
Retained earnings		57,000,000

How would each of these accounts appear after:

1. a cash dividend of $2 per share? Round the number of shares outstanding to the nearest whole number and the other answers to the nearest dollar.

   Cash		$
   Common stock ($ par; shares outstanding)		$
   Additional paid-in capital		$
   Retained earnings		$

2. a 6 percent stock dividend (fair market value is $80 per share)? Use the original balance sheet from the problem statement. Round the number of shares outstanding to the nearest whole number and the other answers to the nearest dollar.

   Cash		$
   Common stock ($ par; shares outstanding)		$
   Additional paid-in capital		$
   Retained earnings		$

3. a one-for-two reverse split? Use the original balance sheet from the problem statement. Round the number of shares outstanding to the nearest whole number and the other answers to the nearest dollar.

   Cash		$
   Common stock ($ par; shares outstanding)		$
   Additional paid-in capital		$
   Retained earnings		$

5.Jackson Enterprises has the following capital (equity) accounts:

Common stock ($1 par; 150,000 shares outstanding)	$	150,000
Additional paid-in capital		300,000
Retained earnings		250,000

The board of directors has declared a 20 percent stock dividend on January 1 and a $0.25 cash dividend on March 1. What changes occur in the capital accounts after each transaction if the price of the stock is $4? Round the number of shares outstanding to the nearest whole number and the other answers to the nearest dollar.

The impact of the 20 percent stock dividend:

Common stock ($ par; shares outstanding)		$
Additional paid-in capital		$
Retained earnings		$

The impact of the $0.25 a share cash dividend:

Common stock ($ par; shares outstanding)		$
Additional paid-in capital		$
Retained earnings		$