On 12/31/2013, Heaton Industries Inc. reported retained earnings of $675,000 on its balance sheet, and it reported that it had $172,500 of net income during the year. On its previous balance sheet, at 12/31/2012, the company had reported $555,000 of retained earnings. No shares were repurchased during 2013.

Required:

a.How much in dividends did Heaton pay during 2013?

b.Does dividend announcement affect the firm's market value? Discuss.