Determine the firms current earnings per share

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Reference no: EM131996431

Stock dividend-investor Personal Finance Problem Security Data Company has outstanding 30,000 shares of common stock currently selling at $39 per share.

The firm most recently had earnings available for common stockholders of $130,000, but it has decided to retain these funds and is r considering a 15% stock dividend in lieu of a cash dividend.

a. Determine the firm's current earnings per share.

b. If Sam Waller currently owns 400 shares of the firm's stock, determine his proportion of ownership currently and under proposed dividend plan.

c. Calculate the market price per share under the 15% stock dividend plan.

d. For the proposed 15% stock dividend plan, calculate the earnings per share after payment of the stock dividend.

e. What is the value of Sam's holdings under the 15% stock dividend plan?

f. Should Sam have any preference with respect to the proposed stock dividend?

a. The firm's current earnings per share is $ 4.33 (Round to the nearest cent)

b. If Sam currently owns 400 shares of the firm's stock, the proportion of the firm Sam currently owns is 1.33% (Round to two decimal places)

The proportion of the firm Sam will own after the 15% stock dividend is %. (Round to two decimal places)

Reference no: EM131996431

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