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).)
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.
Answer and Explanation:
See full answer below.
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Finance 101: Principles of FinanceChapter 16 / Lesson 2