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    Difference in stock price, balance sheet

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    Regular Dividends.

    The balance sheet for Levy Corp. is shown here in market value terms. There are 8000 shares of stock outstanding.

    Cash $ 30,000 Equity $380,000
    Fixed assets 350, 000
    Total $380,000 Total $380,000

    The company has declared a dividend of $1.60 per share. The stock goes ex-divided tomorrow. Ignoring any tax effects, what is the stock selling for today?

    What will it sell for tomorrow? What will the balance sheet look like after the dividends are paid?

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    Solution Preview

    We are given the market value balance sheet. Total value of equity is $380,000 and there are 8,000 shares ...

    Solution Summary

    The solution explains the difference in stock price and balance sheet after the payment of dividends