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Sometimes companies pay dividends in the form of additional shares of stock instead of cash. The impact of making distributions in the form of stock
Sometimes companies pay dividends in the form of additional shares of stock instead of cash. The impact of making distributions in the form of stock dividends is reflected in the statement of stockholders' equity. Consider the case of the Happy Turtle Transporters Company: The pre-stock dividend common stockholders' equity statement for Happy Turtle Transporters Company is as follows Happy Turtle Transporters Company Pre-Stock Dividend Common Stockholders Equity Common stock ($10 par, 2,000,000 shares) Contributed capital in excess of par Retained eamings $20,000,000 $1,500,000 55,000,000 $26,500,000 Total common stockholders' equity Suppose you own 100 shares of Happy Turte Transporters's stock, Heppy Turtk Transporters's stock is market price of 520 per share, and the company recentiy declared & % stock di dilution of your eamings, so you'd like to make some colculations to evaluate the vidend you are wered atout me investment. Based on your celculations, complete the foilowing tabe Happy Turtle Transperters Company Post-Stock Diridend Common Stockholders Equity Common stock Contrbuted ceptal in excess of par Retained eamings Total common stockhoiders equity $26,500,000 ndent earnings per share EPS, *as s i Oo, then the gost-dstrduton Ess wil and the post d strbution market price of Hoppy Tuite Traspotass shares should be De per share After the distreut or, of the stack dve ond, you woud value of your weath w be n09 suren of Hae9T Tute Transporta. stock, ond the O $2,000 O $3,000 750
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