Reference no: EM133070594
Wilson Pharmaceuticals' stock has done very well in the market during the last three years. It has risen from $55 to $80 per share. The firm's current statement of stockholders' equity is as follows:
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Common stock (1 million shares issued at par value of $10 per share)
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$10,000,000
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Paid-in capital in excess of par
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10,000,000
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Retained earnings
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45,000,000
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Net worth
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$65,000,000
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a-1. How many shares would be outstanding after a two-for-one stock split? (Do not round intermediate calculations. Input your answer in millions (e.g., $1.23 million should be entered as "1.23").)
a-2. What would be its par value? (Do not round intermediate calculations and round your answer to 2 decimal places.)
b-1. How many shares would be outstanding after a three-for-one stock split? (Do not round intermediate calculations. Input your answer in millions (e.g., $1.23 million should be entered as "1.23").)
b-2 What would be its par value? (Do not round intermediate calculations and round your answer to 2 decimal places.)
c. Assume that Wilson earned $16 million. What would its earnings per share be before and after the two-for-one stock split? After the three-for-one stock split? (Do not round intermediate calculations and round your answers to 2 decimal places.)
d. What would be the price per share after the two-for-one stock split? After the three-for-one stock split? (Assume that the price-earnings ratio of 5.00 stays the same.) (Do not round intermediate calculations and round your answers to 2 decimal places.)