a) Show the change in the Owners Equity section of the balance sheet if Evergreen declares a 15 stock dividend What will be the new market price share (6 marks) b) Suppose instead of the stock dividend, Evergreen declares a 5 for 2 stock split Show the change in the Owners Equity section of the balance sheet and the new stock price (3 marks) c) Suppose instead, Evergreen uses a residual dividend policy Their capital budget for the upcoming year $1,600,000 Calculate the debt, external equity financing required and the dividends per share ( (6 Marks) d) Suppose instead, Evergreen uses a residual dividend policy Their capital budget for the upcoming year $1,100,000 Calculate the debt, external equity financing required and the dividends per share (6 Marks) e) Suppose instead, Evergreen uses a retention ratio of 30 Their capital budget for the upcoming year $1,600,000 Calculate the debt, external equity financing required and the dividends per share (6 marks) f) Suppose instead, Evergreen follows a stable dividend policy and declares a $2 00 per share dividend The holder of record date is January 10, 2022, and the payment date is January 31, 2022 Emily sold 500 shares of Evergreen on January 7, 2022, to Anna Which of the two investors will receive the dividends How much dividend income with they receive (3 marks) Evergreen Inc's most recent Statement of Financial Position is given below Evergreen Inc Statement of Financial Position As at Dec 31, 2021 Assets Cash $ 425,000 Accounts Receivable $ 400,000 Inventories $ 500 000 Total Current Assets $ 1,325,000 Net Fixed Assets $18 000 000 Liabilities Accounts Payable Other Current Liabilities Total Current Liabilities $ $ $ 300,000 425,000 725,000 LT Debt Common Stock (85,000 shares o s) Retained Earnings $ $ $ 2,500,000 4,500,000 11 600 000 19,325,000 Total Liabilities Total Assets $ 19,325,000 Owners Equity $ Additional Information Current market price per common share $ 195 Before tax cost of borrowing (secured loan) 5 Weighted Average Cost of Capital 12 Net Income for 2021 $925,000 Target D E ratio based on market values 0 25 Corporate tax rate 35 Note Parts a, b, c, d, e, and fare all independent of one another

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a) Show the change in the Owners Equity section of the balance sheet if Evergreen declares a 15% stock dividend. What will be the new

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a) Show the change in the Owners Equity section of the balance sheet if Evergreen declares a 15% stock dividend. What will be the new market price share? (6 marks)

b) Suppose instead of the stock dividend, Evergreen declares a 5 for 2 stock split. Show the change in the Owners Equity section of the balance sheet and the new stock price.(3 marks)
c) Suppose instead, Evergreen uses a residual dividend policy. Their capital budget for the upcoming year = $1,600,000. Calculate the debt, external equity financing required and the dividends per share. ( (6 Marks)
d) Suppose instead, Evergreen uses a residual dividend policy. Their capital budget for the upcoming year = $1,100,000. Calculate the debt, external equity financing required and the dividends per share. (6 Marks)
e) Suppose instead, Evergreen uses a retention ratio of 30%. Their capital budget for the upcoming year = $1,600,000. Calculate the debt, external equity financing required and the dividends per share. (6 marks)
f) Suppose instead, Evergreen follows a stable dividend policy and declares a $2.00 per share dividend. The holder of record date is January 10, 2022, and the payment date is January 31, 2022. Emily sold 500 shares of Evergreen on January 7, 2022, to Anna. Which of the two investors will receive the dividends? How much dividend income with they receive? (3 marks)

Evergreen Inc's most recent Statement of Financial Position is given below. Evergreen Inc. Statement of Financial Position As at Dec 31, 2021 Assets Cash $ 425,000 Accounts Receivable $ 400,000 Inventories $ 500.000 Total Current Assets $ 1,325,000 Net Fixed Assets $18.000.000 Liabilities Accounts Payable Other Current Liabilities Total Current Liabilities $ $ $ 300,000 425,000 725,000 LT Debt Common Stock (85,000 shares o/s) Retained Earnings $ $ $ 2,500,000 4,500,000 11.600.000 19,325,000 Total Liabilities & Total Assets $ 19,325,000 Owners Equity $ Additional Information: Current market price per common share = $ 195 Before tax cost of borrowing (secured loan) = 5% Weighted Average Cost of Capital =12% Net Income for 2021 = $925,000 . Target D/E ratio based on market values = 0.25 Corporate tax rate = 35% Note: Parts a, b, c, d, e, and fare all independent of one another