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VashaNatasha [74]
3 years ago
7

Li Company declared a property dividend of 20,000 shares of its investment in $1 par P Company common stock. The P stock was pur

chased for $5 per share. The fair value of the P stock was $10 per share on the declaration date of the property dividend and $12 per share on the distribution date. What is the amount of the dividend?
Business
1 answer:
kolbaska11 [484]3 years ago
7 0

Answer:

$200,000

Explanation:

DIVIDEND can be defined as the amount of cash which is been paid regularly by a company to its shareholders out of its profits or surplus.

Property dividend of 20,000 shares ×

Fair value of the P stock at $10 per share on the declaration date of the property dividend.

Therefore:

20,000 x $10 = $200,000

The amount of DIVIDEND is $200,000

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More liquid assets are those that can be  turn into cash more quickly than those that  less liquid assets.

If one is thinking about investing in a  liquid asset, surely is because it will need the cash in the short run. On the contrary, we could invest in other financial instruments less liquid (typically those who offer higher yields and have  longer terms), because we are not going to need the money for the moment, and we want to take advantage of that to get a higher yields.

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Ganezh [65]

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Answer:

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false

Explanation:

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