Health

Health Systems Inc. is considering a 10 percent stock dividend. The capital accounts are as follows: Common stock (3,000,000 shares at $10 par) Capital in excess of par Retained earmings S 30,000,000 20,000,000 5,000,000 Net worth $95,000,000 The increase in capital in excess of par as a result of a stock dividend is equal to the shares created times (Market price Par value) The company's stock is selling for $42 per share. The company had total earnings of $8,400,000 with 3,000,000 shares outstanding and earnings per share were $2.80. The firm has a P/E ratio of 15. a. What adjustments would have to be made to the capital accounts for a 10 percent stock dividend? Show the new capital accounts. (Do not round intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000).) Capital Accounts Common stock Capital in excess of par Retained earnings Net worth