Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 (2,500,000 shares) Retained earnings $12,500,000 24,500,000 Net worth $37,000,000 The company's stock is selling for $30 per share, and it earned $7,500,000 during the year with 2,500,000 shares outstanding, indicating a P/E ratio of 10. a. Restate the capital accounts at year end after the 10% stock dividend. Common stock $ 20000000 17000000 Retained earnings Net worth 37000000 > 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 160 shares? Number of shares 176 shares d. If an investor originally had 160 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.) Before stock dividend After stock dividend Total investment $ 4800 $ e. Not available in Connect
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started