The balance sheet for Ferguson Corp. is shown here in market value terms. There

Question

The balance sheet for Ferguson Corp. is shown here in market value terms. There are 10,000 shares of stock outstanding Market Value Balance Sheet $ 45,700 Equity Cash Fixed assets 510,000 $ 555,700 Total 555,700 Total $ 555,700 The company has declared a dividend of $1.80 per share. The stock goes ex dividend tomorrow Ignoring any 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.) Stock price per share Ignoring any tax effects, what will it sell for tomorrow? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) Stock price per share Ignoring any tax effects, what will the balance sheet look like after the dividends are paid? (Do not round intermediate calculations.) Balance Sheet Cash Equity Fixed assets Total Total

Explanation / Answer

Cumdiv price per share = Current MV/No. of shares
= 555,700/10000
= $55.57 per share

Ex div price per share = Cumdiv price - Dividend issued
= 55.57 - 1.80
= $53.77 per share

Balance sheet figures will be as follows:

Cash = 45700 - 18000(dividend of $1.8 * 10000 shares) = $27,700
Fixed assets = $510,000
Total assets = $537,700
Equity = 53.77 * 10000 shares = $537,700

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