Question

After a 2-for-1 stock split, Tyler Company paid a dividend of $1.35 per new share, which represents an 11% increase over last year's pre-split dividend. What was last year's dividend per share? Round your answer to the nearest cent.

Answer 1

Answer:

$2.43 per share

Explanation:

2 for 1 Stock split means 2 share for every 1 share.

Total Dividend on 2 new share:

= Dividend paid per new share × 2

= $1.35 × 2

= $2.7

This is 11% more than the last year dividend.

Therefore,

Last Year dividend:

= (Total Dividend on 2 new share ÷ 111) × 100

= (2.7 ÷ 111) × 100

= 0.0243 × 100

= $2.43 per share