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Elodia [21]
3 years ago
9

Assume that Plavor Brands, Inc. has 10,000,000 common shares outstanding that have a par value of $2 per share. The stock is cur

rently trading for $30 per share. The firm reported a net profit after-tax of $25,000,000. All else equal, what will happen to earnings per share if the company issues a 10% stock dividend
Business
1 answer:
Kay [80]3 years ago
8 0

Answer:

The multiple choices:

Earnings per share will remain the same since a stock dividend does not create an expense.

Earnings per share will increase because the dividend increases the value of the company.

Earnings per share will decrease because the number of shares outstanding will go up.

The impact cannot be determined without additional information on the new price per share.

The correct option is earnings per share will decrease because the number of shares outstanding will go up.

Explanation:

Initial EPS=earnings attributable to common stock/average weighted number of common stock

earnings attributable to common stock is $25,000,000

average weighted number of common stock is 10,000,000

Initial EPS=$25,000,000/10,000,000

                 =$2.5

EPS with 10% stock dividend :

average weighted number of common stock=10,000,000*(1+10%)

average weighted number of common stock=10,000,000*(1+0.1)

average weighted number of common stock=11,00,000

EPS with 10% stock dividend=$25,000,000/11,000,000

                                                  =$2.27

EPS reduced from $2.5 to $2.27 due to 10% stock dividend as there are more shares than  previously.

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Demand per hour for gasoline at a local station is normally distributed with a mean of 875 gallons and std deviation of 55 gallo
marusya05 [52]

The probability that demand is greater than 1800 gallons over a 2 hour period is : 0.5

<u>Given data :</u>

Mean value of gasoline per hour = 875 gallons

Standard deviation = 55 gallons

<h3>Determine the probability of demand being greater than 1800 gallons over 2 hours </h3>

Demand for gas in 1 hour = X₁

Demand for gas in 2 hours = X₁ + X₂

Therefore ; ( X₁ + X₂) ~ N ( u₁+u₂, sd₁² + sd₂² )

In order to  calculate probabilities for normals apply the equation below

Z = ( X- u ) / sd

where : u = 1800, sd = √ ( 55² + 55² ) = 77.78

using the z-table

P( Y > 1800) = P( Z > ( 1800 - 1800 ) / 77.78)

                    = P( Z>0 ) = 0.5

Hence we can conclude that The probability that demand is greater than 1800 gallons over a 2 hour period is : 0.5.

Learn more about probability : brainly.com/question/24756209

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5 0
2 years ago
a business owner wishes to know which clients are the highest paying clients of his business what tool is he likely to use to fi
natima [27]

The answer would be Sorting

8 0
3 years ago
Read 2 more answers
Assume lawyer services are priced by the hour and elasticity of demand for a particular lawyer is 0.6. If she were to increase h
Dmitry [639]

Answer:

C. Fall, 30%, Rise

Explanation:

  • Price Elasticity of Demand is responsive change in demand, due to change in price.

P.Ed = % change in demand / % change in price.

Given : Price rise by 50% , P.Ed = 0.6

So, % change in demand = P.ed x % change in price

% change in demand = 0.6 (50)

% change in demand = 30%

Law of demand states negative relationship between price & demand, so P.ed is negative. Price rise 50% reduces demand by 30%.

  • P.Ed can be : Elastic ( > 1 ), or Inelastic ( < 1 ).  If P.Ed is Elastic, price & total revenue are inversely related. If P.Ed is Inelastic, price & total revenue are directly related.

So, Given PEd = 0.6 (i.e < 1 ) : Inelastic Demand implies price & total revenue are directly related related to each other. So, price fall lead to TR fall & price rise lead to TR rise.

6 0
3 years ago
A local pizzeria sells 500 large pepperoni pizzas per week at a price of $20 each. Suppose the owner of the pizzeria tells you t
n200080 [17]

Answer:

He will sell 600 pizzas per week if he cuts the price by 10%.

Explanation:

Price Elasticity of demand measure the responsiveness of demand to change in the price of a product. It calculates the ratio of change in demand and change in price.

Price elasticity of demand = % change in demand / % change in price

-2 = % change in demand / 10%

% Change in in demand = -2 x 10%

% Change in in demand = -20%

Following the law of demand as price decreases the demand of the product increases. So the sale of Pizzas will be increased by 20%.

Current Sale of Pizzas = 500 pizzas

Increase in sales  = 500 x 20% = 100 pizzas

Increased sale = 500 + 100 = 600 pizzas

7 0
3 years ago
This year, Linda Moore earned a $112,000 salary and $2,200 interest income from a jumbo Certificate of Deposit.She recognized a
olya-2409 [2.1K]

Answer:

a) salary $112,000

Interest income $2,200

Capital gain on stock -

gross income $114,200

capital gains and losses

capital gain 10,500

capital loss 15,300

Net capital loss = 4800

net loss offset on Gross income = 3000

Net Gross income $111,200

capital loss that is carried forward = $1800

b) salary $112,000

Interest income $2,200

Capital gain on stock -

gross income $114,200

CAPITAL LOSSES/GAINS

capital gain 16000

capital loss 15300

Net Capital gain = 700  

ADD taxable capital gains on Gross income

c) salary $112,000

Interest income $2,200

gross income $114,200

capital losses/ gains

capital loss 15300

capital loss 17000

Total Capital LOSS = $ 32300

Set off against income = (3000)

Losses carried forward =$29300

Explanation:

Capital losses can be offset on normal Gross income but only up to $3000 per year

6 0
3 years ago
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