can someone explain to me each one of the answers. up to why that was the answer ?
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If stock dividend is given, the company On selain the cash and so es osb divided is given the cosh balance will do so fase fost share it be issue and the Podars is very costly The Shese hallex will say will get additional shaxs They need not pay any tax for it andil Roge Actually, the total amount of dividend is the same as wu you have 25 Dividend on 75 sur 50-54 - Dividend on 25 shows the company is woning. instead of $300. may be bound the Company Puls Hut the site bud w is a than the Aed some ish one is to by typowy 4:43 Answer 1 of 1 Done a. Stock dividend is issue of additional shares to the share holders without any payment. Thus, Stock dividend do not inolve any cash receipt. The retained earnings are converted into share capital. b. Book value per share : 2014 $ 37.8 and 2015 $37.4 Book value = Stock holders equityumber of shares. c. You own 7500 + 10% stock dividend = 8250 shares. Market value of 7500 shares in 2014 = 7500*28 = $210000 Market value of 8250 shares in 2015 = 7500*26 =$214500. Interest increased by $4500. d. Stock dividend will benefit the share holder with additional shares without any payment.Obviosly the value of interest will increase. e. If stock dividend is given, the company can retain the cash and use it for expansion. If cash dividend is given the cash balance will reduce. So for expansion further shares must be issued. And the process is very costly. The share holder will anyway will get additional shares. They need not pay any tax for it until it is sold. f. Actually, the total amount of dividend is the same as now you have 250 shares more Dividend on 7500 shares = 7500*1.54 = $11550 Dividend on 8250 shares = 7500*1.4 = $11550 g. The company is borrowing $500000 instead of $300000 may be because the company feels that the return it can earn on the borrowed money is greater than the cost of interest. And some cash reserve is required to be kept by the company for its working. L01, 2, 3 C11-63. Understanding Shareholders' Meeting, Managerial Communications, and Financial Interpretations and 2015 is presented below. It is part of the financial data just reviewed at a stockholders' meeting The stockholders' equity section of Pillar Corporation's comparative balance sheet at the end of 2014 December 31, 2015 December 31, 2014 Common stock, $10 par value, 600,000 shares authorized; issued at December 31, 2015, 275,000 shares; 2014, 250,000 shares Paid-in capital in excess of par Retained earnings (see Note). Total stockholders' equity $ 2,750,000 4,575,000 2,960,000 $10,285,000 $2,500,000 4,125,000 2,825,000 $9,450,000 Note: Availability of retained earnings for cash dividends is restricted by $2,000,000 due to a planned plant expansion Prepare brief but reasonably complete answers to the following questions: b. What was my book value per share at the end of 2014 and 2015? c. I owned 7,500 shares of Pillar in 2014 and have not sold any shares. How much more or less of the corporation do I own at December 31, 2015 and what happened to the market value of d. I heard someone say that stock dividends don't give me anything I didn't already have. Why did you issue one? Are you trying to fool us? . Instead of a stock dividend, why didn't you declare a cash dividend and let us buy the new 1 cutting back on the dividends I receive? you have $2.000.000 put aside in retained earnings for the new plant addition, which will shares that were issued? ated to The following items were also disclosed at the stockholders' meeting: net income for 2015 was $1,220,000; a 10% stock dividend was issued December 14, 2015; when the stock dividend was declared the market value was $28 per share; the market value per share at December 31, 2015, was $26; management plans to borrow $500,000 to help finance a new plant addition, which is expected to cost a total of $2,300,000; and the customary $1.54 per share cash dividend had been revised to $1.40 when declared and issued the last week of December 2015. As part of its investor relations program, during the stockholders' meeting management asked stockholders to write any questions they might have concerning the firm's operations or finances. As assistant controller, you are given the stockholders' questions. ved the - 2008 stock at ompany imately REQUIRED 6. What did Pillar do with the cash proceeds from the stock dividend issued in December? Is "pre- and so hat was my interest in the company? 7, 2008, sheet. 1. Why are you 8. W cost $2,300,000, why ponder by Jack LO2, 3, ita are you borrowing $500,000 instead of just the $300,000 needed? Managerial Ethics
