Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 13-12 (similar to) Question Help O (Stock dividends) In the spring of 2016, the CFO of HTPL Distributing Company decided to distribute a stock

image text in transcribed
Problem 13-12 (similar to) Question Help O (Stock dividends) In the spring of 2016, the CFO of HTPL Distributing Company decided to distribute a stock dividend to its shareholders. Specifically, the CFO proposed that the company pay 0.045 shares of stock to the holders of each share of common stock such that the holder of 1,000 shares of stock would receive an additional 45 shares of common stock. a. If the firm had total net income for the year of $12,000,000 and had 23,000,000 shares of common stock outstanding before the stock dividend, what was the firm's earnings per share? b. After paying the stock dividend, what was the firm's earnings per share? c. If you owned 1,000 shares of stock before the stock dividend, how many dollars of earnings did the firm earn from your 1,000-share investment? After the stock dividend was paid, how many dollars of earnings did the firm earn on your larger share holdings? What effect would you expect from the payment of the stock dividend on your total investment in the firm? a. Before the stock dividend, what was the firm's earninps per share? (Round to four decimal places.)

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

Principles Of Financial Management

Authors: Haim Levy, Marshall Sarnat

1st Edition

0137097751, 978-0137097753

More Books

Students also viewed these Finance questions

Question

In Problem find the indicated derivative and simplify dx

Answered: 1 week ago