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    Equity Changes due to Dividend

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    The common equity section of Daizy Company balance sheet shows

    Common stock (80,000,000 shares @ 5 par value) $400,000,000
    Additional paid in capital $1,200,000,000
    Retained Earnings $800,000,000
    Total common stock holder's equity $2,400,000,000

    If Daizy Company Net Income is $160,000,000 this year and it pays out half as a dividend, which one of the following is correct?

    A. par value will be $480,000,000
    B. Retained Earnings = $960,000,000
    C. Total common stockholders equity will be $2,841,000,000
    D. Book value per share will be $31.00
    E. Earning per share = $1.00.

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    Solution Preview

    If Daizy Company Net Income is $160,000,000 this year and it pays out half as a dividend, which one of the following ...

    Solution Summary

    The solution determines what the equity changes due to dividend are for Daizy Company.

    $2.19