Question

Six months ago, Benders Gym repurchased $140,000 of its common stock. The company pays regular dividends totaling $18,500 per quarter. What is the amount of the cash flow to stockholders for the past year if 1,200 new shares were issued and sold for $38 a share

Answer 1

Answer:

$168,400

Explanation:

Benders Gym repurchased their common stock at the rate of $140,000

Benders Gym pays a regular dividend of $18,500 four times in a year

For a period of one year 1,200 shares was issued at the rate of $38 per share

Therefore, the amount of cash flow to the stockholders for the past one year can be calculated as follows

=[18,500×4]-[1,200×38-(140,000)]

= 74,000-[45,600-140,000]

= 74,000-[-94,000]

= 74,000+94,000

= $168,400

Hence the amount of cash flow to the stock holders for a period of one year is $168,400