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

Question

The balance sheet for Pie Crust, Inc., is shown here in market value terms. There are 25,000 shares of stock outstanding.

The company has declared a dividend of $0.90 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 25,000 shares of stock outstanding.

Explanation / Answer

Pie Crust Inc Details Amt $/Nos Outstanding no of stocks                25,000.0 Market Value of Equity              745,000.0 Market Price per share = $                  29.80 Dividend per share = $                    0.90 Total Amt of dividend   $          22,500.00 Equity Value after Dividend paid              722,500.0 Outstanding no of stocks                25,000.0 Market Price per share ex dividend = $                  28.90 Balance Sheet After Dividend Paid Asset   Amt $ Liability Amt $ Cash              152,500.0 Equity          722,500.0 Fixed Assets              570,000.0 Total              722,500.0 Total          722,500.0

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