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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

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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 Accounts Receivable $ Inventories $ Total Current Assets $ Net Fixed Assets $ 425,000 400,000 500.000 1,325,000 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 Total Liabilities & Owners Equity Total Assets $ 19,325,000 $ 19,325,000 . . 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% . . O a) Show the change in the Owner's 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 Owner's 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. ( 16 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)

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