The equity section of Pretzer plc consists of ordinary shares (10 par) 2,000,000 and retained earnings 500,000.

Question:

The equity section of Pretzer plc consists of ordinary shares (£10 par) £2,000,000 and retained earnings £500,000. A 15% share dividend (30,000 shares) is declared when the market price per share is £16. Show the before-and-after effects of the dividend on the following.
a. The components of equity.
b. Shares outstanding.
c. Par value per share.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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