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Stock dividend-investor personal finance problem

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Stock dividend-Investor Personal Finance Problem

Security Data Company has outstanding 80,000 shares of common stock currently selling at ?$44 per share. The firm most recently had earnings available for common stockholders of ?$101,000?, but it has decided to retain these funds and is considering a 20?% 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 the proposed 20?% stock dividend plan.

c. Calculate the market price per share under the 20?% stock dividend plan.

d. For the proposed 20?% 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 20?% stock dividend? plan?

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

Reference no: EM132813646

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