Question
Health systems Inc is considering a 15 percent stock dividend. The capital accounts are as follows Common stock (6,000,000 shares at $10 par...$60,000,000 Capital in
Health systems Inc is considering a 15 percent stock dividend. The capital accounts are as follows Common stock (6,000,000 shares at $10 par...$60,000,000 Capital in excess of par* 35,000,000 Retained earnings 75,000,000 Net Worth 170,000,000 The company stock is selling for #32 per share the company had total earnings of 19,200,000 with 6,000,000 shares outstanding and earnings per share were 3.20 the firm has a p/e ratio of 10
Adjustment for 15 percent stock dividend (show capital accounts)
Adjustment to EPS and stock price
Shares now if originally had 80
Total investment worth before and after stock dividend if P/E ratio remains constant
If new shares remained at $32, what is total investment
If remained at $32, is investor better off
If remained at $32, what is the dividend yield
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