Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
The balance sheet for Kare Corp
The balance sheet for Kare Corp. is shown here in market value terms. There are 6,000 shares of stock outstanding. Market Value Balance Sheet Cash $44,900 Equity $474,900 430,000 Fixed assets 474,900 474,900 Total $ Total $ The company has declared a dividend of $1.80 per share. The stock goes ex dividend tomorrow. a. Ignoring any tax effects, what is the stock selling for today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Ignoring any tax effects, what will the stock sell for tomorrow? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Stock price Stock price b. c. Ignoring any tax effects, what will the balance sheet look like after the dividends are paid?
Expert Solution
| a. Stock Price | $79.15. |
| b. Stock Price | $77.35 |
working:
a.
stock selling for today = market value of equity / number of shares
=>$474,900 /6,000 shares
=>$79.15.
b
stock price tomorrow = stock price today - dividend per share
=>$79.15 -1.80
=>$77.35.
C.
balance sheet after dividends are paid:
| Cash | 34,100 | Equity | 464,100 |
| Fixed assets | 430,000 | ||
| Total | 464,100 | Total | 464,100 |
Working:
cash balance = opening cash balance - (divdend per share * number of shares)
=>$44,900 - ($1.80*6000)
=>$44,900 -10,800
=>$34,100.
value of equity = new price per share * number of shares.
=>$77.35 *6,000 shares.
=>$464,100.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
