unit5-problem

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Reta in e d ea rn i ng s 675, 300 Ca p ita l s u rp lus 155, 000 Co m m o n stoc k ($ 1 pa r v a lu e) $ 30, 000

2. Sto c k D iv i d e n d s T h e o w n e rs '

e qu ity a c c o u nts fo r Octa g o n Intern at iona l are shown here

1. D iv i d e n d s a n d Ta x e s M id n i g h t Ho u r, Inc . , has d ec la re d a $6 . 30 per- share d ividen

P R O B L E M S

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ì n d D iv i d e n d P o l icy

b . RC ha s a 15 pe rc e nt sto c k d iv id e n d ?

a . RC has a f iv e - fo r- thre e stoc k s p l it?

the s h a re p r ic e b e afte r

4. Sto c k S p l i ts a n d Sto c k D iv i d e n d s Ro l l Corpo rat ion (RC) c urre nt ly has 270, 000 shares of stock

- ' " e O U tstanding n o w iNhat

p u v a l u e p c l ö i t e

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Đewţm ï ne M e n ew

n u m b e r ot sh ar es outstanding in pm Ģ)tnrough w. ù. ĦC \ \ a

s a t o u t - tor - s ev e n r ev e rs e sib ck sp \ W?

G · Ħc ħ as a Ą2 . 5 perc en t sm ek ìvi đenđ

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\ \ J

Tota l $743 , 000 Total $743, 000

Ħ x e d as sets 598 , 000 Equity 616 , 000

Cas h $145 , 000 Debt $127 , 000

M A R K ET VALUE B ALANCE SHEET

di % e {} d is s i ' "a r to t h a t f o r a c a s h d iv id e n d). The re a re 25 , 000sharesotstockounûng.

l , £ ' ' " ' ' " ? " . The s toc k goes ex d iv i d en d tom orrow m e ch ro n o l o g y ° sno

w ńo w

T h e m a r k e t v a l u e b a l a n c e s h e e t f o r O u t b o x M a n u ta a u r i n g ìs s h o w n h e r e . ou to o x

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c . Which adjustm e nt rate is m o re co nse rva. Tiv ' v ' l l y l b. If the adjustm e nt rate is . 6 in stea d , w h at is th e d iv id e n d o n e y e a r t rom now ?

a . If the adjustm ent rate is . 3 as d ef ine d in th e L i nt n e r m o d e l , w hat i s fn e d iividenû one l ear o m nûw ·

rat io is 4o pe rcent . The com pany exp e cts to h av e e a rn in g s p e r s h a re ot $6. 20 one year ttom now.

16. Div i d e n d S m o o th i n g T h e S h arp e C o . Ju s t p a id a d iv i d e n d ot $2. 05 Per sh are oĺ sh ek . Hs b rget Đajü?