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Cash Dividends. The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $0.50 per share, and there are 20,000 shares of stock...

8. Cash Dividends. The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will
be $0.50 per share, and there are 20,000 shares of stock outstanding. The market-value balance
sheet for Payout is shown on the following table.
Assets Liabilities and Equity
Cash $100,000 Equity $1,000,000
Fixed Assets $900,000

a. What price is Payout stock selling for today?
b. What price will it sell for tomorrow? Ignore taxes.

This question was asked on Apr 06, 2010.

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