Blueprint Problem: Cash Dividends

If you are an owne of a company you expect to be able to take pat of the comany's profits. If you own shares of stock of a coporation, you own part of the company. A dividend is a distribution of a company accumulated profits to its owners, the stockholders. The distributions are usually in the form of cash dividends, but they may also be in the form of stock dividends or even noncash assets, which can be distibuted to the owners. The decision to pay any dividend is mad by the company board of directors, not by the management of the company. When the board announces that the company will pay a dividnd, there are three dats specified: the declaration date, the date of record and the payment date:

Consider the following and determine the number of outstanding shares at each date:

Jan. 1 Bryant company blalance sheet reveals that it is authorized to sell 825,000 shares of stock; 657,000 shares are issued and outstanding

February 15: Bryant issued an additional 22,000 shares of stock

Aug. 31: Bryant Company board of direstors declared a dividend of $1,861,200 to be paid on september 30 to shareholders on record on september 21

Sept. 6: Bryant purchaed 330,000 shares of its own stock to be available for employee purchase

Sept. 21: Bryant garthered the necessary data for all outstanding stockholders as of this date

Sept. 29: Bryant company sold 27,800 of its shares of treasury stock

Sept. 30: Bryant paid the $1,861,200 dividend

(a) Calculate the dividend per share to be paid toe ach common stockholder, rounded to nearest cent

(b) Now, assume that the September 6 and September 29 transactions did not occur. Calculate the dividend per hsare in this case