Health Systems Inc. is considering a 15 percent stock dividend. The capital accounts are as follows: Common stock (4,000,000 shares at $10 par Capital in excess of pant Retained earnings Net worth $ 40,000,000 15,000,000 45,000,000 $100,000,000 *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 $36 per share. The company had total earnings of $12,000,000 with 4.000.000 shares outstanding and earnings per share were $3.00. The firm has a P/E ratio of 12. a. What adjustments would have to be made to the capital accounts for a 15 percent stock dividend? Show the new capital accou counts: (Do not round intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000).) Answer is complete but not entirely correct. Common stock Capital in excess of par Retained earnings Net worth Capital Accounts $ 46,000,000 23.400,000 30,600,000 X $ 100,000,000 b. What adjustments would be made to EPS and the stock price? (Assume the P/E ratio remains constant.) (Do not round intermediate calculations and round your answers to 2 decimal places.) Answer is complete but not entirely correct. $ EPS Stock price 1.30 X 20.87 X $ c. How many shares would an investor have if he or she originally had 80? (Do not round intermediate calculations and round your answer to the nearest whole share.) Answer is complete but not entirely correct. Number of shares 115 X d. What is the investor's total investment worth before and after the stock dividend if the P/E ratio remains constant? (Do not round intermediate calculations and round your answers to the nearest whole dollar.); Answer is complete but not entirely correct. Total Investment 2.400 X Before stock dividend $ After stock dividend $ 2,400 X e. Assume Mr. Heart, the president of Health Systems, wishes to benefit stockholders by keeping the cash dividend at a previous level of $1.05 in spite of the fact that the stockholders now have 15 percent more shares. Because the cash dividend is not reduced, the stock price is assumed to remain at $36. What is an investor's total investment worth after the stock dividend if he/she had 80 shares before the stock dividend? Answer is complete but not entirely correct. e. Assume Mr. Heart, the president of Health Systems, wishes to benefit stockholders by keeping the cash dividend at a previous level of $1.05 in spite of the fact that the stockholders now have 15 percent more shares. Because the cash dividend is not reduced, the stock price is assumed to remain at $36. What is an investor's total investment worth after the stock dividend if he/she had 80 shares before the stock dividend? Answer is complete but not entirely correct. Total investment $ 2,760 X f. Under the scenario described in part e, is the investor better off? Yes No g. As a final question, what is the dividend yield on this stock under the scenario described in part e? (Input your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Dividend yield 4.58 X %