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(Stock dividends) in the spring of 2014 the CFO of Placebo Pharmaceutical Inc. took a proposal to the firms board of directors to distribute a noncash dividend to the firms shareholders in the form of new shares of common stock. Specifically, the CFO prop

05 / 03 / 2018 Assignment

This paper circulates around the core theme of (Stock dividends) in the spring of 2014 the CFO of Placebo Pharmaceutical Inc. took a proposal to the firms board of directors to distribute a noncash dividend to the firms shareholders in the form of new shares of common stock. Specifically, the CFO prop together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 45. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.

(Stock dividends) in the spring of 2014 the CFO of Placebo Pharmaceutical Inc.
took a proposal to the firms board of directors to distribute a noncash dividend to the firms
shareholders in the form of new shares of common stock. Specifically, the CFO proposed that the
company pay 0.015 shares of stock to the holders of each share of common stock that the holder
of 1,000 shares of stock would receive an additional 15 shares of common stock.
a. If placebo had total net income for the year of $10,000,000 and 21,000,000 shares of

common stock outstanding before the stock dividend, what are the firms earnings per
share?
b. After paying the stock dividend, what are the firms earnings per share?

c. If you owned 1,000 shares of stock before the stock dividend, how many dollars of

earnings did the firm earn on your 1,000 share investment? After the stock dividend is
paid, how many dollars of earnings did the firm earn on your larger share holding? What
effect would you expect from the payment of the stock dividend on your total investment
in the firm?


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