Lee Ann inc, has declared a $9.50 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 15 percent Custom Essay

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Lee Ann inc, has declared a $9.50 per share dividend. Suppose capital gains are not
taxed, but dividends are taxed at 15 percent. New IRS regulations require that taxes be withheld when the dividend is paid. Lee Ann sells for $115 per share, and the stock is about  to go ex- dividend. What do you think the ex-dividend price will be ?

Rol lcorporation (RC) currently has 330,000 shares of stock outstanding that sell for $64 per share.  Assuming no market imperfactions or tax effects exist, what will the share price be after:

  1. RC has a five for three stock split?
  2. RC has a 15 percent stock dividends?
  3. RC has a 42.5 percent stock dividends?
  4. RC has a four for seven reverse stock split?

Determine the new number of shares outstanding in parts (a) through (D).

 

The Balance sheet for Levy corp. is shown here in market value terms there are 12,000 shares of stock outstanding.

 

Market Value Balance sheet

 

Cash                $55,00             Equity   $465,000

 

Fixed assets     410,000                           _____

 

Total                $465,000         Total      $465,000

 

The company has declared a dividend of $1.90 per share. The stock goes ex dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? What will it sell for tomorrow? What will the balance sheet look like after the dividends are paid?

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