Question
Wilson Pharmaceuticals' stock has done very well in the market during the last three years. It has risen from $45 to $70 per share. The
Wilson Pharmaceuticals' stock has done very well in the market during the last three years. It has risen from $45 to $70 per share. The firm's current statement of stockholders' equity is as follows:
Common stock (4 million shares issued at par value of $10 per share)$40,000,000
Paid-in capital in excess of par16,000,000
Retained earnings44,000,000
Net worth$100,000,000
a-1.How many shares would be outstanding after a two-for-one stock split?(Do not round intermediate calculations. Input your answer in millions (e.g., $1.23 million should be entered as "1.23").)
a-2.What would be its par value?(Do not round intermediate calculations and round your answer to 2 decimal places.)
b-1.How many shares would be outstanding after a three-for-one stock split?(Do not round intermediate calculations. Input your answer in millions (e.g., $1.23 million should be entered as "1.23").)
b-2What would be its par value?(Do not round intermediate calculations and round your answer to 2 decimal places.)
c.Assume that Wilson earned $13 million. What would its earnings per share be before and after the two-for-one stock split? After the three-for-one stock split?(Do not round intermediate calculations and round your answers to 2 decimal places.)
d.What would be the price per share after the two-for-one stock split? After the three-for-one stock split? (Assume that the price-earnings ratio of 21.54 stays the same.)(Do not round intermediate calculations and round your answers to 2 decimal places.)
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