The Green Fiddle has declared a $5 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15 percent

The Green Fiddle has declared a $5 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. Green Fiddle stock sells for $71.50 per share, and the stock is about to go ex-dividend. What will the ex-dividend price be?    A.  $67.25 B.  $67.90 C.  $78.30 D.  $79.50 E.  $82.23 Ex-dividend price = $71.50 - [$5 × (1 - 0.15)] = $67.25

91.

The owners' equity accounts for Blueswell Industries are shown here:     If Blueswell Industries declares a 1-for-5 reverse stock split, there will be ____ shares outstanding at a par value of _____ per share.    A.  1,800; $1.00 B.  1,800; $5.00 C.  9,000; $5.00 D.  45,000; $0.20 E.  45,000; $1.00 New shares = 9,000 × 1/5 = 1,800 shares New par value = $1 × 5/1 = $5

92.

The Turtle Cave currently has 160,000 shares of stock outstanding that sell for $60 per share. Assume no market imperfections or tax effects exist. What will the new share price be if the firm declares a 10 percent stock dividend?    A.  $52.17 B.  $54.55 C.  $60.00 D.  $64.50 E.  $69.00 New price = $60 (1/1.10) = $54.55

93.

Glendale Paving currently has 120,000 shares of stock outstanding that sell for $54 per share. Assume no market imperfections or tax effects exist. What will the new share price be if the firm declares a 40 percent stock dividend?    A.  $31.12 B.  $32.08 C.  $35.19 D.  $38.57 E.  $40.00 New price = $54 (1/1.40) = $38.57