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P13-4. Answers - P13-4 Howe Company Dividend contraints and...

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The Howe Company's stockholders' equity account is attached. The earning available for common stckholders from the period's operation are $100,000, which have Common stock (400,00 shares @ $4 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity "In states where the firm’s legal capital is defin stock, the firm could pay out $340,000 ($200, without impairing its capital. In states where th paid-in capital, the firm could pay out only $14 Paid-in capital in excess of par = Number of share holders Dividend per share DPS = Dividend per share = total earnings / number Cash= Number of share holders Dividend per share DPS ( with out borrowing) = Retained earnings are "Earnings not distributed to Therefore when we issue divendens we loose the the following will occur: For A = For B = retained earning reduces by $80,000 P13-4. Howe Company: Dividend contraints and effects on stockholers' equity A) What is the maximum dividend per share that the firm can pay? (Assume that legal capital inclu
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