A firm has a market value equal to its book value. Currently, the firm has excess cash of $7,000 and other assets of $21,000. Equity is worth $28,000. The firm has 600 shares of stock outstanding and net income of $2,400. What will the stock price per share be if the fim pays out Its excess cash as a cash dividend?

A firm has a market value equal to its book value. Currently, the firm has excess cash of $7,000 and other assets of $21,000. Equity is worth $28,000. The firm has 600 shares of stock outstanding and net income of $2,400. What will the stock price per share be if the fim pays out Its excess cash as a cash dividend?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 3Q: If a “typical” firm reports $20 million of retained earnings on its balance sheet, can the firm...

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