Corporate Operations

(Dividends, Book Value per Share, and Earnings per Share)

1. How do share dividends affect stock prices?

2. In what situations should the Board Directors consider to declare a dividend of any form?

3. Suppose you have 1,000 ordinary shares of Company A. The EPS is P6.00, the DPS is

P3.00, and the stock sells for P90 per share. Company A declares 10% dividends?

What would be the effect in the stockholders' equity of Company A?

4. The stockholders' equity accounts of FGC Corporation on December 31, 2019: 1.5% Preference shares, P10 par, 200,000 shares issued and oustanding P 2,000,000 Ordinary shares P15 par, 50,000 shares issued and outstanding 750,000 Preference share - Share Premium 400,000 Ordinary share - Share Premium 100,000 Retained earnings 850,000 Total 4,100,000 Prepare journal entries to record the declaration and payment of dividends for each of the following independent cases: a) A share dividend of 15% is declared and issued. b) A share dividend of 25% is declared and issued 5. The stockholders' equity accounts of JFT Corporation on December 31, 2019 20% Preference share capital, P10 par, 100,000 shares issued and oustanding P 1,000,000 Ordinary shares P12 par, 150,000 shares issued and outstanding 1,800,000 Total P 2,800,000 Additional information: Cash dividends were declared on this date. Dividends were last declared and paid on December 31, 2017. Compute for the total dividends and dividends per share on preference share capital and ordinary share capital under each of the following independent cases: a) The preference share is cumulative and participating and the amount of dividend declared is P250,000. b) The preference share is non-cumulative and participating and the amount of dividend declared is P50,000. c) The preference share is cumulative and non-participating and the amount of dividen declared is P180,000. d) The preference share is cumulative and participating and the amount of dividend declared is P75,000. e) The preference share is non-cumulative and non-participating and the amount of dividend declared is P130,000