Question: Marston Mfg recently declared a 4 for 1 stock split
Marston Mfg. recently declared a 4- for- 1 stock split for its common shares. Before the split the firm’s share price had risen to $ 600 per share and the firm’s CFO felt that this high stock price inhibited trading in the firm’s shares. Prior to the split the firm had 10 million shares of stock outstanding and had net income of $ 40 million. a. Before the stock split what is Marston’s earnings per share? b. Following the stock split, how many shares of common stock will Marston have outstanding? c. What are the firm’s earnings per share after the stock split? d. If you owned 100 shares of stock before the split, how much are the total earnings for your shares? How much are the total earnings on your post- split shares? e. Were you better off financially as the holder of 100 shares of pre- split stock after the 4- for- 1 split? Explain.
Relevant QuestionsThe Dunn Corporation is planning to pay dividends of $ 500,000. There are 250,000 shares outstanding, and earnings per share are $5. The stock should sell for $ 50 after the ex- dividend date. If, instead of paying a ...FarmCo, Inc. follows a policy of paying out cash dividends equal to the residual amount that remains after funding 60 percent of its planned capital expenditures. The firm tries to maintain a 40 percent debt and 60 percent ...What would be the probable effect on a firm’s cash position of the following events? a. Rapidly rising sales b. A delay in the payment of payables c. A more liberal credit policy on sales (to the firm’s customers) d. ...On March 31, 2013, Mike’s Bike Shop had outstanding accounts receivable of $ 17,500. Mike’s sales are roughly evenly split between credit and cash sales, with the credit sales collected half in the month after the sale ...Dell Computer Corporation (DELL) has long been recognized for its innovative approach to managing its working capital. Describe how Dell pioneered the management of net working capital to free up resources in the firm.
Post your question