A conpany whose stock is selling for $45 has the following balance sheet: Assets    $32,000     Liabilities      $10,000                                 Common Stock    6,000                     ($6 par;1,000 shares issued)                  Additional paid-in

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Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
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Chapter12: Investing In Stocks And Bonds
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Problem 4FPE: The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million...
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A conpany whose stock is selling for $45 has the following balance sheet:

Assets    $32,000     Liabilities      $10,000

                                Common Stock    6,000

                    ($6 par;1,000 shares issued)

                 Additional paid-in capital  2,000

                         Retained earnings    14,000

 

a. Construct a new balance sheet showing a 3 for 1 stock split. What is the new price for the stock?

b. What would be the balance sheet if the firm paid a 10% stock dividend (instead of the stock split)?

 

 

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