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The market value balance sheet for Tidwell Manufacturing is shown here. Tidwell has declared a 10...

Question:

The market value balance sheet for Tidwell Manufacturing is shown here. Tidwell has declared a 10 percent stock dividend. The stock goes ex-dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend). There are 17,000 shares of stock outstanding.

Market Value Balance Sheet:

Cash $116,000 Debt $157,200
Fixed assets 660,000 Equity 618,800
Total $776,000 Total $776,000

Required: What will the ex-dividend price be? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Dividend

The dividend is distributed to the common stockholder in the ratio of the number of stock is held by the stockholder. The dividend is distributed from the retained earnings or free reserves available for distribution.

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Homemade Dividends: Definition & Examples

from Finance 101: Principles of Finance

Chapter 16 / Lesson 2
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