Phillips Rock and Mud is trying to determine the maximum amount of cash dividends it can pay this year. Assume its balance sheet is as follows:<\/p>
Assets<\/p>
Cash $ 369,000<\/p>
Accounts receivable 843,000<\/p>
Fixed assets 993,000<\/p>
Total assets $ 2,205,000<\/p>
<\/p>
Liabilities and Stockholders' Equity<\/p>
Accounts payable $ 476,000<\/p>
Long term payable 314,000<\/p>
Common stock (285,000 shares at $1 par) 285,000<\/p>
Retained earnings 1,130,000<\/p>
Total liabilities and stockholders' equity $ 2,205,000<\/p>
<\/p>
a-1. From a legal perspective, what is the maximum amount of dividends per share the firm could pay? (Do not round intermediate calculations and round your answer to 2 decimal places.)<\/strong><\/p> DIvidends per share:_________<\/strong><\/p> <\/p> a-2. Is this realistic?<\/strong><\/p> Yes or NO?<\/strong><\/p> <\/p> b.<\/strong>In terms of cash availability, what is the maximum amount of dividends per share the firm could pay?(Do not round intermediate calculations and round your answer to 2 decimal places.)<\/strong><\/p> Dividends per share:__________<\/strong><\/p> <\/p> c.<\/strong>Assume the firm earned an 24 percent return on stockholders' equity last year. If the board wishes to pay out 50 percent of earnings in the form of dividends, how much will dividends per share be?(Do not round intermediate calculations and round your answer to 2 decimal places.)<\/strong><\/p> Dividends per share:__________<\/strong><\/p>",
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