Question: You own 5 000 shares of 4 par value common stock

You own 5,000 shares of $4 par value common stock of Cohen & Cohen Hardware Corp. The company has 50,000 shares of common stock outstanding. Cohen & Cohen does not have any other classes of stock outstanding.
Required:
(a) If Cohen & Cohen declares a cash dividend of $30,000, how much of this dividend can you expect to receive? What is the amount of dividend per share?
(b) If Cohen & Cohen decides to sell an additional 14,000 shares of common stock, how many of these shares will you be entitled to purchase? Explain.
(c) Presently, Cohen & Cohen’s total stockholders’ equity is $3,200,000, and the company’s common stock is trading for $71 per share on a major stock exchange. What is the total ‘‘value’’ of the Cohen & Cohen shares that you own? What is the book value of each of your shares? Is either of these amounts equal to the amount you paid for the shares? Explain.

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  • CreatedMarch 27, 2015
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