109 j e davis pharmaceuticals corporation which

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109. J E Davis Pharmaceuticals Corporation which manufactures biotech drugs has beenexperiencing a tremendous growth in the price of its common stock. The stock price increasedfrom $5.00 on January 1, 20X1 to $21.00 per share on December 31, 20X5. Its current networth statement is as follows:Common stock(500,000 shares)$50,000,000Retained earnings3,500,00018-39
Chapter 18 - Dividend Policy and Retained EarningsTotal Net Worth$53,500,000A) What changes would occur in the above statement of net worth after a 4 for 1 stock split?B) Earnings for 20X5 were $3,10,000, what would EPS be before and after the stock split?
Accessibility: Keyboard NavigationBlooms: ApplyDifficulty: MediumLearning Objective: 18-06 Distinguish the effect of stock splits and stock dividends on the position of the shareholders. Calculate thechanges in the balance sheet that result.Topic: 18-21 Value to the Investor110. The shareholders' equity portion of Dexter Company follows:Common stock (1.0 million shares)$20,000,000Retained earnings12,000,000$32,000,00018-40
Chapter 18 - Dividend Policy and Retained EarningsThe current market value of Dexter's stock is $30. Show what the balance sheet will look likeif Brimstone declares a 10% stock dividend.
Accessibility: Keyboard NavigationBlooms: ApplyDifficulty: MediumLearning Objective: 18-06 Distinguish the effect of stock splits and stock dividends on the position of the shareholders. Calculate thechanges in the balance sheet that result.Topic: 18-20 Accounting Considerations18-41
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