What is the maximum amount of dividends per share

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Question: Phillips Rock and Mud is trying to determine the maximum amount of cash dividends it can pay this year. Assume its balance sheet is as follows:

528_Liabilities.png

a. From a legal perspective, what is the maximum amount of dividends per share the firm could pay? Is this realistic?

b. In terms of cash availability, what is the maximum amount of dividends per share the firm could pay? c. Assume the firm earned 16 percent return on stockholders' equity last year. If the board wishes to pay out 60 percent of earnings in the form of dividends, how much will dividends per share be? (Round to two places to the right of the decimal point.)

Reference no: EM131792454

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