Question
Valley Mills construction inc had the following stockholders equity on june 30,20X8. Common stock- no par value 200,000 shares authorized, 1000,000=250,000 retained earnings 190,000 total
Valley Mills construction inc had the following stockholders equity on june 30,20X8. Common stock- no par value 200,000 shares authorized, 1000,000=250,000 retained earnings 190,000 total stock equity $440.00. In the past , valley mills has paid an annual cash dividend of $0.25 per share despite the large earnings balance the board of fired wished to conserve cash for expansion. The board delayed payments of cash dividend and in july distributed 10% stock dividend. During August the company cash position improved. The board then declared and paid a cash dividend of $0.25 per share in September. Supposed you owned 1000 shares of valley mills common stock acquired 3 years ago, prior to the 10% stock dividend. The market price of the stock k was $22 per share before any of these dividend. Requirements
What amount of cash dividend did you receive last year- before the stock dividend? What amount of cash will you receive after the stock dividend. How does the stock dividend affect your proportionate ownership in valley mills construction? Explain. Immediately after the stock dividend was distributed the Market value of valley mills construction decreased from $22 to $20 per share. Dies this decreased represent a loss to you. Explain
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