The balance sheet for Pie Crust, Inc., is shown here in market value terms. Ther

ID: 2759936 • Letter: T

Question

The balance sheet for Pie Crust, Inc., is shown here in market value terms. There are 29,000 shares of stock outstanding.

The company has declared a dividend of $1.60 per share. The stock goes ex-dividend tomorrow. Ignore all tax effects.

What is the stock selling for today? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

What will it sell for tomorrow? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

The balance sheet for Pie Crust, Inc., is shown here in market value terms. There are 29,000 shares of stock outstanding.

Equity =$635970

No. of Share= 29000

1- Today Stock Price = Market Value of Equity/No. of Share

= $635970/29000= $21.93 per Share

2- Stock Price Tomorrow= Current Price - Dividend Paid

= $21.93-$1.60 = $20.33 per share

Total Dividend Paid =29000*1.60= $46400

Cash after Dividend Payment= 136000- 46400= $89600

BALANCE SHEET-

Asseyts Amount Equity & Liab. Cash $89,600.00 Equity $589,570.00 Fixed Assets $499,970.00 Total $589,570.00 Total $589,570.00

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