Stock Dividends The owner's equity accounts for Hexagon International are shown here:
Common stock ($1 par value) $10,000
Capital surplus $ 180,000
Retained earnings $ 586,500
Total owner's equity $ 776,500
a. If Hexagon stock currently sells for $25 per share and a 10% stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
b. If Hexagon declared a 25% stock dividend, how would the accounts change?
Solution Preview
a. If Hexagon stock currently sells for $25 per share and a 10% stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
The number of shares outstanding are 10,000 (common stock is $10,000 with $1 par value so number of shares = 10,000/1=10,000). A 10% stock dividend would mean 10,000X10%=1,000 shares are issued. ...
Solution Summary
The solution explains how to calculate the new shares to be issued under stock dividends and the impact on accounts.
...Dividend Payout ratio = Dividends/(Net Income Preferred dividends) Dividends = (6,360,000-1,200,000) X 0.25 = 1,290,000 7. When applying the treasury stock...
... Its dividend per share was $3.20 five percent of the total world consumption of in 2006 for a dividend yield (dividends/stock price) cigarettes is in China ...
... are the pros and cons of stock dividends and stock splits, and how are those actions related to cash dividends? Should Western pay a stock dividend or split ...
... asked permission to resume payment of its $0.12 per-share common stock dividend, which was ... of the company and yet it is suggesting to pay cash for dividends! ...
...Stock dividends have no value because the price drops in order to account for the dividend. ... Note that some stock dividends have a cash-dividend option. ...
... 8-12: Nonconstant Growth Stock Valuation Simpkins Corporation is ... investors expect Simpkins to begin paying dividends, with the first dividend of $ 1.00 ...
... Suppose NoGro Inc has just issued a dividend of $2.90 per share. Subsequent dividends will remain at $2.90 indefinitely. Returns on the stock firms like NoGro ...
... Dec 1 Received cash dividends of $1 per share on Hippo common stock. (a) Journalize the transactions (b) Explain how dividend revenues and the gain (loss) on ...
... of new issue of common stock, wealth-maximizing investment decision for a firm, capital structure, cash dividends, Modigliani and Miller, dividend policy, cost ...
