Reference no: EM132987192

Wilson Pharmaceuticals' stock has done very well in the market during the last three years. It has risen from $75 to $100 per share. The firm's current statement of stockholders' equity is as follows:

Common stock (2 million shares issued at par value of $10 per share) $20,000,000
Paid-in capital in excess of par 19,000,000
Retained earnings 46,000,000
Net worth $85,000,000

Problem 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").)

Problem a-2. What would be its par value? (Do not round intermediate calculations and round your answer to 2 decimal places.)

Problem 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").)

Problem b-2 What would be its par value? (Do not round intermediate calculations and round your answer to 2 decimal places.)

Problem c. Assume that Wilson earned $18 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.)

Problem 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 11.11 stays the same.) (Do not round intermediate calculations and round your answers to 2 decimal places.)