Review problem of the Spears Company

Reference no: EM131831192

Question: Spears Company has had 4 years of record earnings. Due to this success, the market price of its 400,000 shares of $2 par value common stock has increased from $6 per share to $50. During this period, paid-in capital remained the same at $2,400,000. Retained earnings increased from $1,800,000 to $12,000,000. CEO Don Ames is considering either

(1) a 15% stock dividend or

(2) a 2-for-1 stock split.

He asks you to show the before-and-after effects of each option on

(a) retained earnings,

(b) total stockholders' equity, and

Reference no: EM131831192

Questions Cloud

What is the present value of all of the future cash flows : What is the present value of all of the future cash flows, assuming a 17.5% annual cost of capital?

Determine the dividend paid to preferred stockholders : Sparks Corporation has 3,000 shares of 8%, $100 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared.

Maximize their expected monetary value : Why do people make decisions that don't maximize their expected monetary value?

Calculating the number of periods : Calculating the Number of Periods. You expect to receive $55,000 at graduation in 2 years.

Review problem of the Spears Company : Spears Company has had 4 years of record earnings. Due to this success, the market price of its 400,000 shares of $2 par value common stock has increased.

Leased on the basis of future worth analysis : If the company’s MARR is 13% per year, should the clamshell be purchased or leased on the basis of a future worth analysis?

What is the approximate equivalent uniform monthly cost : What is the approximate equivalent uniform monthly cost till October if the interest rate is 18% per year compounded monthly.

Construct stockholders equity section of the balance sheet : Hoyle Corporation has issued 100,000 shares of $5 par value common stock. It was authorized 500,000 shares. The paid-in capital in excess of par value.

Monthly cash borrowing and loan repayment : prepare a cash forecast that includes the monthly cash receipts, monthly cash payments, and monthly cash borrowing and loan repayment.

User Account

All Pages