Compute post-stock dividend price of complex computers stock

Assignment Help Financial Management
Reference no: EM13927266

The board of directors of Complex Computers has decided to declare a 20 per- cent stock dividend. The company's common stockholders' equity is as  follows:

Pre-Stock Dividend Common  StockholdersEquity

Common stock ($1 par, 100,000 shares)

$  100,000

Contributed capital in excess of  par

900,000

Retained earnings

  5,000,000

Total common stockholders' equity

 $6,000,000

The common stock of Complex Computers is currently trading at $80 a share. The company is growing rapidly and has never paid a cash  dividend.

a. Show the company's common stockholders' equity after the stock dividend.

b. Calculate the post-stock dividend price of Complex Computers stock, assuming no other changes occur.

Reference no: EM13927266

Questions Cloud

Mba overview and effective research : Use the MBA Overview and Effective Research and Writing at University of Phoenix Modules you reviewed to complete this assignment. Write a paper that analyzes the role of a manager within the functional areas of business:
Positive combination of functional expertise : Question 1: Members of __________ can solve problems with a positive combination of functional expertise and integrative or total systems thinking.
Deals with collection, classification, analysis : It is the science that deals with collection, classification, analysis, and interpretation of information or data. It is the process used to assign numbers to variables of individual population units.
Organization and purpose of chaebols : Explain the organization and purpose of chaebols. Identify the positive and negative characteristics of chaebols for both local and global economy. Also, explain the role they play in the South Korean economy.
Compute post-stock dividend price of complex computers stock : Show the company's common stockholders' equity after the stock dividend. Calculate the post-stock dividend price of Complex Computers stock, assuming no other changes occur.
Who are your competitors and how are you different : You guys just have to check the spelling and grammatical error and sentence structure of whole documents if its necessary please rewrite the sentences .
Material requirement planning chart : Create an Master Production Schedule and a Material Requirement Planning Chart
Blackberry business research plan : Blackberry was once the leadership in the cell phone industry, but today they are one of the least recognized manufactures for cell phones. Team C will discuss how we plan to increase their revenue by indentifying what customers want and need to c..
Pimary function or purpose of descriptive statistics : What is the primary function or purpose of descriptive statistics?  Summari Explanation: In other words, descriptive statistics is all about making sense of complex data.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the net present value and internal rate of return

What is the Net Present Value (NPV) and Internal Rate of Return (IRR) of spending $350 today on an energy efficient appliance which will save you $150 a year for the next three years assuming you could invest this money elsewhere and earn 10%?

  Market risk of project is its degree of operating leverage

One factor that can affect the market risk of a project is its degree of operating leverage, which is

  What is the value of the common stock

If a firm pays a $2 dividend and that is expected to remain constant, what is the value of the common stock, if the firm’s required rate of return is 16%?

  Compute the unit sales price at which blake must sell

Compute the unit sales price at which Blake must sell its product in the current year in order to earn a budgeted target profit of £200,000 - Calculate a value in response Unhappy about the prospect of a price increase, Blake's sales manager wou..

  What was the approximate inflation rate

Your investments increased in value by 12.6 percent last year but your purchasing power increased by only 11.9 percent. What was the approximate inflation rate? (Round your answer to 1 decimal place. Omit the "%" sign in your response.)

  Accumulate money for his down payment

John plans to buy a vacation home in 6 years from now and wants to have saved $91,024 for a down payment. How much money should he place today in a savings account that earns 8.11 percent per year compounded daily to accumulate money for his down pay..

  What is the profitability index of the project

A project has an initial outlay of $1,160. It has a single payoff at the end of year 6 of $9,960. What is the profitability index (PI) of the project, if the company’s cost of capital is 11.37 percent?

  What was the face value

Lori Koetters was looking at different simple discount notes available to her. She found a note that would cost her $135 in interest at 8% for 60 days. What was the face value?

  What is the effective annual rate on loan

Suppose National Bank offers to lend you $10,000 for one year at a nominal annual rate (annual percentage rate) of 8.00%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the y..

  Portfolio theory risk

What is portfolio theory and why is it important to investing behavior?

  Capital investment proposals

The division managers of Chester Construction Corporation submit capital investment proposals each year for evaluation at the corporate level. Typically, the total dollar amount requested by the divisional managers far exceeds the company’s capital i..

  Five-to-eight-month forward rate agreement with a firm

You enter into a five-to-eight-month forward rate agreement with a firm. You agree to lend the firm a 3-month loan of $5 million starting 5 months from now, with a quarterly compounded forward interest rate of 2.5% per annum. What is the implied forw..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd