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Sauro Brothers Inc. is currently considering declaring a dividend to its common shareholders, according to one of the following plans: 1. Declare a cash
Sauro Brothers Inc. is currently considering declaring a dividend to its common shareholders, according to one of the following plans: 1. Declare a cash dividend of $11 per share. 2. Declare a 20% stock dividend. Sauro Brothers would distribute one common share for every five common shares currently held. The company's common shares are currently selling for $20 per share. Sauro Brothers is authorized to issue 125,000 common shares. To date, the company has issued 77,200 shares at $10 per share and is currently holding 5,300 of these as treasury shares. (a) How many common shares are eligible to receive a dividend?
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