wrviaenus WIHT Oe I Ue aid Homemade Dividends [LO2] In the previow $750 total in dividends the first year. What will years? ons Hore we Wouedk Q = 350 Tong bp nN1= 8350 s problem, suppose you want only | your homemade dividend be in two alee in Ye eS oco HE SO | Diferenca /Suvplus= 1850 -Fs0 = co We rot te rede fle ce in fe 950550 Wwe buy shoves usoctl Milo Since we art money bp hesowk Le maui Find pric per shee Ye Raman mi Fe oe 5 = 9.43 al. Stock Splits [LO3] For the comp: }~ will change if: dies. Number of Shares bbe pought= So.u3= 21.8124 Sreres Tokl Shawen © 24.8124 = lo2/ 8121 23 bo2L Play #2582 $54,265,092 any in Problem 2, show how the equity accounts it, How many shares are outstanding | a, Alexander declares a four-for-one stock spl are? now? What is the new par value per share’ I b. Alexander declares a one-for-five reverse stock split. How m 4 y par value per share? — standing now? What is the new par pero 2 ae ee a any shares are ut- Das a = . New par value rer Share> 0.50 y Hy ofo, 125 Nuss Hanes outslondings igcoo + )= seo Nese paw value per chase: doses CT) = 42.50 ; — soevvsereny ume sane ay a Casn aividend. 7, Stock Dividends [LO3] ‘The market value balance sheet for Sci-Fi Crimes Manu f- __ facturing is shown here. Sci-Fi Crimes has declared a 25 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is simi-— lar to that for a cash dividend), There are 14,000 shares of stock outstanding. Wha {_ will the ex-dividend price be? ee | Market Value Balance Sheet | Cash $ 86,000 Debt $145,000 | Fixed assets 630,000 Equity 571,000 Total Tiel S600Curent shave prea = Stye00 =#0. #4 yoo if = Cu2s)= “Total Rauihy afler stork oliidants 4 5° FD 1a) Stock k Repurchase [LO4] Rudolph Corporation is | Versus a share repurchase. In cither case, $11,000 would be s ating an extra dividend Current earnings 1 $58 per share. There are 2,000 ‘ions in answering the first wo are $1.40 per share, and the stock currently sells for shares outstanding. [gnore taxes and other imper | questions. a, Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth |b, What will be the effect on Rudolph’s EPS and scenarios? Tc. Inthe real world, which of these actions would E ratio under the two different you recommend? Why? Cask pia~9 58 [Tad Ds =f 09 Mawherol haves = 2 Eps=wi.u0 uy, Coch Doadbed » Des shoes “ange = # cdi i Atle) = yse-W5.52 952.5 hase + Rusher of Se ee Undo Cash Vicidead: Shayehaldte wealth =diridund + value! Ha shove = Ys.5+952.5< 95% Under Srase Repurchase +A chane wots tepunnared by fps ft 5 TE share vias ust epuncbased= 95% ash dirdench Titel 46 vakio ~ Ore purchase = $5€_ > F443 canysperthon 4h \Be-dividod eas - #525 _ y 32.5 H.YOShare Repurchase + EPS = bok in come = Yor2O0@D — 2800 IS eed Shares outstunding 2200~ 184.46 PETE P/E vakio = 9 SE = 737.50 915s