Question

Murphy's, Inc., has 32,050 shares of stock outstanding with a par value of $1 per share. The market value is $12 per share. The balance sheet shows $88,050 in the capital in excess of par account, $32,050 in the common stock account, and $149,950 in the retained earnings account. The firm just announced a stock dividend of 12 percent. What will the market price per share be after the dividend

Answer 1

Answer:

$10.71

Explanation:

Data provided as the question below:-

Stock outstanding per share = 32,050

Market value per share = $12

The computation of market per share be after the dividend is shown below:-

Where for computing the $1.12

= $1 + 0.12 = $1.12

= (32,050 × $12) ÷ (32,050 × $1.12)

= $384,600 ÷ $35,896

= $10.71

Therefore, the market price per share is $10.71