Health Systems Incorporated is considering a $15$ percent stock dividend. The capital accounts are as follows:

Common stock $(3,500,000$ shares at $$10$ par$)$ $ $35,000,000$

Capital in excess of par$*10,000,000$

Retained earnings $45,000,000$

Net worth $ $90,000,000$

$*$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$$s stock is selling for $$28$ per share. The company had total earnings of $$7,000,000$ with $3,500,000$ shares outstanding and earnings per share were $$2\mathrm{.}00.$ The firm has a P$/$E ratio of $14.$

What adjustments would have to be made to the capital accounts for a $15$ percent stock dividend? Show the new capital accounts.

Note: Do not round intermediate calculations. Input your answers in dollars, not millions $($e$.$g$.$ $$1,230,000).$

What adjustments would be made to EPS and the stock price? $($Assume the P$/$E ratio remains constant.$)$

Note: Do not round intermediate calculations and round your answers to $2$ decimal places.

How many shares would an investor have if he or she originally had $100?$

Note: Do not round intermediate calculations and round your answer to the nearest whole share.

What is the investor$$s total investment worth before and after the stock dividend if the P$/$E ratio remains constant?

Note: Do not round intermediate calculations and round your answers to the nearest whole dollar.

Assume Mr$.$ Heart, the president of Health Systems, wishes to benefit stockholders by keeping the cash dividend at a previous level of $$1\mathrm{.}15$ in spite of the fact that the stockholders now have $15$ percent more shares. Because the cash dividend is not reduced, the stock price is assumed to remain at $$28.$

What is an investor$$s total investment worth after the stock dividend if he$/$she had $100$ shares before the stock dividend?

Under the scenario described in part e$,$ is the investor better off?

multiple choice

Yes

No

As a final question, what is the dividend yield on this stock under the scenario described in part e$?$

Note: Input your answer as a percent rounded to $2$ decimal places.