Toombs Media Corp. recently completed a 3-for-1 stock split. Prior to the split, itsstock sold for $80 per share. The firm's total market value was unchanged by thesplit. Other things held constant, what is the best estimate of the stock's post-splitprice?$240$120$26.40$22.40$26.67

Stock split ratio = 3:1 price prior to stock split = $ 80 The firms market value was unchanged after…

Answered: Toombs Media Corp. recently completed a…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 14EB: Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the...

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For a recent year, OfficeMax and Staples are two companies competing in the retail office supply business. OfficeMax had a net income of 34,894,000, while Staples had a net loss of 210,706,000. OfficeMax had preferred stock of 28,726,000 with preferred dividends of 2,123,000. Staples had no preferred stock. The average outstanding common shares for each company were as follows: a. Determine the earnings per share for each company. Round to the nearest cent. b. Evaluate the relative profitability of the two companies.
Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)
Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the stocks market value per share is $30. At that time, there are 10,000 shares of $1 par value common stock outstanding (none held in treasury). What is the new par value of the shares and how many shares are outstanding after the split? What is the total amount of equity before and after the split?
According to a company press release, on January 5, 2012, Hansen Natural Corporation changed its name to Monster Beverage Corporation. According to Yahoo Finance, on that day the value of the company stock (symbol: MNST) was $15.64 per share. On January 5, 2018, the stock closed at $63.49 per share. This represents an increase of nearly 306%. A. Discuss the factors that might influence the increase in share price. B. Consider yourself as a potential shareholder. What factors would you consider when deciding whether or not to purchase shares in Monster Beverage Corporation today?
Stock Split Fauver Enterprises declared a 3-for-1 stock split last year, and this year its dividend is 1.50 per share. This total dividend payout represents a 6% increase over last years pre-split total dividend payout. What was last years dividend per share?
The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company’s stock currently trades at $60 per share. Compute the stock’s earnings per share (EPS). What is the stock’s P/E ratio? Determine what the stock’s dividend yield would be if it paid $1.75 per share to common stockholders.
Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the dividends paid to common stockholders for last year were 2,600,000 and that the market price per share of common stock is 51.50. Required: 1. Compute the dividends per share. 2. Compute the dividend yield. (Note: Round to two decimal places.) 3. Compute the dividend payout ratio. (Note: Round to two decimal places.)
Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the stocks market value per share is $30. At that time, there are 10,000 shares of $1 par value common stock outstanding (none held in treasury). What is the new par value of the shares and how many shares are outstanding after the split?
In the spring of 1984, Disney Productions' stock was selling for about 3.125 per share. (All prices have been adjusted for 4-for-l splits in 1986 and 1992.) Then Saul Steinberg, a New York financier, began acquiring it; after he had 12%, he announced a tender offer for another 37% of the stockwhich would bring his holdings up to 49%at a price of 4.22 per share. Disney's management then announced plans to buy Gibson Greeting Cards and Arvida Corporation, paying for them with stock. It also lined up bank credit and (according to Steinberg) was prepared to borrow up to 2 billion and use the funds to repurchase shares at a higher price than Steinberg was offering. All of these efforts were designed to keep Steinberg from taking control. In June, Disney's management agreed to pay Steinberg 4.84 per share, which gave him a gain of about 60 million on a 2-month investment of about 26.5 million. When Disney's buyback of Steinberg's shares was announced, the stock price fell almost instantly from 4.25 to 2.875. Many Disney stockholders were irate, and they sued to block the buyout. Also, the Disney affair added fuel to the fire in a congressional committee that was holding hearings on proposed legislation that would (1) prohibit someone from acquiring more than 10% of a firm's stock without making a tender offer for all the remaining shares; (2) prohibit poison pill tactics such as those Disney's management had used to fight off Steinberg; (3) prohibit buybacks, such as the deal eventually offered to Steinberg, (greenmail) unless there was an approving vote by stockholders; and (4) prohibit (or substantially curtail) the use of golden parachutes (the one thing Disney's management did not try). Set forth the arguments for and against this type of legislation. What provisions, if any, should it contain? Also, look up Disney's current stock price to see how its stockholders have fared. Note that Disney's stock was split 3-for-l in July 1998.
Stock Dividend Comparison Although Oriole Company has enough retained earnings legally to declare a dividend, its working capital is low. The board of directors is considering a stock dividend instead of a cash dividend. The common stock is currently selling at 34 per share. The following is Orioles current shareholders equity: Required: 1. Assuming a 15% stock dividend is declared and issued, prepare the shareholders equity section immediately after the date of issuance. 2. Assuming, instead, that a 30% stock dividend is declared and issued, prepare the shareholders equity section immediately after the date of issuance. 3. Next Level What unusual result do you notice when you compare your answers from Requirement 1 with Requirement 2? From a theoretical standpoint, how might this have been avoided?
Downie Foods recently completed a 4-for-1 stock split. Prior to the split, its stock sold for $70 per share. If the firm's total market value increased by 5% as a result of increased liquidity caused by the split, what was the stock price following the split?
Mid-State BankCorp recently declared a 7-for-2 stock split. Prior to the split, the stock sold for $100 per share. If the firm's total market value is unchanged by the split, what will the stock price be following the split? Select one: a. $28.57 b. $25.43 c. $26.29 d. $28.86 e. $35.71

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Toombs Media Corp. recently completed a 3-for-1 stock split. Prior to the split, its stock sold for $80 per share. The firm's total market value was unchanged by the split. Other things held constant, what is the best estimate of the stock's post-split price? $240 $120 $26.40 $22.40 $26.67