The balance sheet for Pie Crust, Inc., is shown here in market value terms. Ther
ID: 2733329 • Letter: T
Question
The balance sheet for Pie Crust, Inc., is shown here in market value terms. There are 30,000 shares of stock outstanding.
The company has declared a dividend of $1.70 per share. The stock goes ex-dividend tomorrow. Ignore all tax effects.
What is the stock selling for today? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
What will it sell for tomorrow? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
The balance sheet for Pie Crust, Inc., is shown here in market value terms. There are 30,000 shares of stock outstanding.
Explanation / Answer
Pie Crust Inc. All Amounts in $ Current Price of Stock 32.12 $ per share Price of Stock post dividend Equity as given above 963600 Less : Dividends @ 1.70 per 51000 Revised Total Equity 912600 Revised Price of Stock 30.42 $ per share What will the balance sheet look like after the dividends are paid? Cash 86000 Equity 912600 Fixed assets 826600 Total 912600 Total 912600