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show detailed work 1. Dividends and Taxes [@ LO2] Gatto, Inc., has declared a $5.85 per share dividend. Suppose capital gains are not taxed, but
show detailed work 1. Dividends and Taxes [@ LO2] Gatto, Inc., has declared a $5.85 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The company's stock sells for $78.35 per share, and the stock is about to go ex dividend. What do you think the exdividend price will be? 2. Stock Dividends [ [ LO3] The owners' equity accounts for Vulcano International are shown here: a. If the company's stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change. b. If the company declared a 25 percent stock dividend, how would the accounts change? 3. Stock Splits [ [ L LO3] For the company in Problem 2, show how the equity accounts will change if: a. The company declares a 4-for-1 stock split. How many shares are outstanding now? What is the new par value per share? b. The company declares a 1-for- 5 reverse stock split. How many shares are outstanding now? What is the new par value per share
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