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Thomas Edison State FIN 301 written assignment 3




Question;Chapter 10 Problem Set on pages;238?239.;3.;Jersey Mining earns $9.50;a share, sells for $90, and pays a $6 per share dividend. The stock is spit two;for one and a $3 per share cash dividend is declared.;a);What will be the new price;of the stock;b);If the firm?s total;earnings do not change, what is the payout ratio before and after the stock;split?;4.;Firm A had the following;selected items on its balance sheet;?;Cash $ 28,000,000;?;Common stock ($50 par;2,000,000 shares outstanding) $100,000,000;?;Additional paid-in capital;$10,000,000;?;Retained earnings $;62,000,000;How would each of these accounts;appear after;a);A cash dividend of $1 per;share?;b);A 5 percent stock dividend;(fair market value is $100 per share)?;c);A one-for-two reverse;split?;5.;Jackson Enterprises has;the following capital (equity) accounts;?;Common stock ($1 par;100,000 shares outstanding) $100,000;?;Additional paid-in capital;200,000;?;Retained earnings 225,000;The board of directors has declared a;20 percent stock dividend on January 1 and a $0.25 cash dividend on March 1.;What changes occur in the capital accounts after each transaction if the price;of the stock is $4?;7.;What effect will a;two-for-one stock split have on the following items found on a firm's financial;statements?;a);earnings per share;$4.20;b);total equity $10,000,000;c);long-term debt $4,300,000;d);additional paid-in capital;$1,534,000;e);number of shares;outstanding 1,000,000;f);earnings $4,200,000;4.;You are considering;purchasing the preferred stock of a firm but are concerned about its capacity;to pay the dividend. To help allay that fear, you compute the;times-preferred-dividend-earned ratio for the past three years from the;following data taken from the firm's financial statements;Year;X1 X2 X3;Operating;income $12,000,000 $15,000,000 $17,000,000;Interest;3,000,000 5,900,000 11,000,000;Taxes 4,000,000 5;400,000 4,000,000;Preferred;dividends 1,000,000 1,000,000 1,500,000;Common;dividends 3,000,000;2,000,000


Paper#50800 | Written in 18-Jul-2015

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