Reference no: EM132185002
Matrix Corp Inc. is considering a 15 percent stock dividend. The capital accounts are as follows:
Common stock (4,000,000 shares) $40,000,000
Retained earnings 60,000,000
Net worth$100,000,000
The company's stock is selling for $40 per share. The company had total earnings of $12,000,000 with 4,000,000 shares outstanding and EPS were $3.00. The firm has a P/E ratio of 13.33.
Restate the EPS and share price after the stock split (Assume the P/E ratio remains constant). (Do not round intermediate calculations. Round the final answers to 2 decimal places.)
Stock price$ ????
What is the investor's total investment worth before and after the stock dividend if the P/E ratio remains constant? (There may be a slight difference due to rounding.) (Do not round intermediate calculations. Round the After stock dividend answer to 2 decimal places.)
Total investment
- Before stock dividend
- After stock dividend$