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Problem 18-28 Vegas Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years but is currently contemplating some
Problem 18-28 Vegas Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years but is currently contemplating some kind of dividend. The capital accounts for the firm are: Common stock (2,000,000 shares) Retained earnings $20,000,000 23,000,000 Net worth $43,000,000 The company's stock is selling for $40 per share, and it earned $8,000,000 during the year with 2,000,000 shares outstanding, indicating a P/E ratio of 10. a. Restate the capital accounts at year end after the 10% stock dividend. Common stock Retained earnings Net worth b. Restate the EPS and share price. (Assume the P/E ratio remains constant.) (Do not round intermediate calculations. Round the final answers to 2 decimal places.) b. Restate the EPS and share price. (Assume the P/E ratio remains constant.) (Do not round intermediate calculations. Round the final answers to 2 decimal places.) EPS Share price c. How many shares would an investor end up with if he or she originally had 150 shares? Number of shares shares d. If an investor originally had 150 shares, what is the investor's total investment worth before and after the stock dividend if the P/E ratio remains constant? (Do not round intermediate calculations.) Total investment ta Before stock dividend After stock dividend ta e. Not available in Connect
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