1) Investor LLC has the following abbreviated balance sheet: Cash = $ 7000 Other
ID: 2719717 • Letter: 1
Question
1) Investor LLC has the following abbreviated balance sheet:
Cash = $7000
Other Assets = $18000
Debt = $0
Equity = $25000
Shares outstanding = 2000.
Now suppose that the company pays a cash dividend of $1.20 per share. What would the total assets of the firm be after the dividend payment?
$______
Place your answer to the nearest dollar without using the dollar sign or comma.
2) E-Ticket System has just made a big announcement: The firm will split its stock 2-for-one (2:1). E-Ticket's current price per share is $34 per share, and there are 1000 shares outstanding. What is the share price after the announcement?
$______
Place your answer in dollars and cents without the dollar sign.
3) US Parcel Inc has 5900 shares of stock outstanding and a current stock price of $16.50 per share. The company has no debt. The company is currently short on cash and announces that instead of a cash dividend they will pay the following stock dividend to all shareholders: one new share of stock for each 5 shares held. What will the new price per share if US Parcel be after the stock dividend goes into effect.
$_____
Place your answer in dollars and cents without the dollar sign.
4) JJ Inc just paid a dividend of $2.85 per share to its shareholders. All of JJ's shareholders are taxed at the rate of 34%. How much of the dividend do these shareholders get to keep?.
$____
Place your answer in dollars and cents without the dollar sign.
5) Giggle Inc reports the following abbreviated balance sheet: Cash = $10000
Other Asset = $19000
Debt = $0
Equity = $29000
Number of shares outstanding = 1000
Giggle just paid a cash dividend of $1.00 per share. What is the new share price after the dividend payment?
$______
Place your answer in dollars and cents without the dollar sign.
Explanation / Answer
Ans-
1)Cash = $7000
Other Assets = $18000
Debt = $0
Equity = $25000
Shares outstanding = 2000.
cash dividend of $1.20 per share
total cash dividend(2000*1.2)$2400
cash remaining(7000-2400)$5600
Total assets (5600+18000)$22600
2)The firm will split its stock 2-for-one (2:1).
current price per share $34/share,
No of share 1000
No of share after split(1000/2)500
Price per share(34*2)$68
3)No of share 5900
current stock price $16.50/share
stock dividend 1:5
no of share(5900/5)+5900=7080
new price per remain same as $16.5/share
4)Dividend paid $2.85/share
less-tax @34% .0.97
after tax price $1.88
5)Cash = $10000
Other Asset = $19000
Debt = $0
Equity = $29000
Number of shares outstanding = 1000
cash dividend $1/share
total cash dividend(1000*1)$1000
price per share remain same (29000/1000)$29/share
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