Question
Answer all questions. Nabil Corporation consists of 250 grocery stores throughout the country. At the beginning of 2020 , its statement of financial position showed
Answer all questions.\ Nabil Corporation consists of 250 grocery stores throughout the country. At the beginning of 2020 , its statement of financial position showed the following information:\ During the year, the net income equalled to RM160,000. Management was undecided on what to do with the income. Nabil Corporation paid a dividend of RM0.35 per share last year and the current stock price is RM14.50. The firm has a 5% growth rate in earnings and dividends, and the tax bracket is 40%.\ (a) If a RM0.25 cash dividend is paid calculate the following:\ (i) Total dividend to be paid. (1 mark)\ (ii) New Retained Earnings. (4 marks)\ (iii) Show changes that would occur in the statement of financial position for Nabil Corporation. (3 marks) (b) If 5% stock dividend is given and no cash dividend paid, evaluate the following:\ (i) Market value of the shares.\ (2 marks)\ (ii) New retained earnings.\ (3 marks)\ (iii) New number of common stocks after stock dividend. (1 mark) (iv) New paid in capital. (6 marks)
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