The Montauk Company has a dividend reinvestment plan in which shareholders owning 25% of its common stock

Question:

The Montauk Company has a dividend reinvestment plan in which shareholders owning 25% of its common stock participate. Last year the firm’s EPS was $4.20, and its payout ratio was 50%. There are 2 million shares of common stock outstanding. How much new capital did Montauk raise through the reinvestment program?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...