Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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?

  1. 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

2.

  1. 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Innovation And Finance

Authors: Andreas Pyka, Hans-Peter Burghof

1st Edition

ISBN: 0415696852, 978-0415696852

More Books

Students also viewed these Finance questions

Question

Discuss the differences and similarities between ethnicity and race

Answered: 1 week ago

Question

Show the properties and structure of allotropes of carbon.

Answered: 1 week ago