Question
How can I do these problems? ABC Corp. has 2,000 shares of stock outstanding with a par value of $1 per share and a market
How can I do these problems?
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ABC Corp. has 2,000 shares of stock outstanding with a par value of $1 per share and a market value of $24 per share. The balance sheet shows $2,000 in the common stock account, $9,500 in the capital in excess of par account, and $14,500 in the retained earnings account. The firm just announced a stock dividend of 75 percent. What is the market value per share after the dividend? A- $12.00, B- $14.86, C- $13.71, D- $45.50, E- $42.00
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A scenario exists that supports an argument in favor of a low dividend policy when:
a preponderance of stockholders have minimal taxable income.
the majority of the stockholders have other investment opportunities that offer higher rewards with similar risk characteristics.
tax laws allow capital gains to be deferred until the gain is realized.
corporate tax rates exceed personal tax rates.
few, if any, positive net present value projects are available to a firm.
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