Analyzing and Computing Dividends and Effect of Options Exercises Following is the stockholders' equity section of the
Question:
Analyzing and Computing Dividends and Effect of Options Exercises
Following is the stockholders' equity section of the Intuit Inc. balance sheet (dollars in millions, except par value; shares in thousands). Changes in the company's outstanding shares are due to (1) treasury share purchases by the company and (2) issues of treasury shares for employee stock options.
| Stockholders' Equity ($ millions) | July 31, 2014 | July 31, 2013 |
|---|---|---|
| Preferred stock, $0.01 par value | ||
| Authorized-1,345 shares total; 145 shares designated Series A; | ||
| 250 shares designated Series B Junior Participating | ||
| Issued and outstanding - none | $ - | $ - |
| Common stock, $0.01 par value | ||
| Authorized-750,000 shares | ||
| Outstanding-286,085 shares at July 31,2014 and 301,848 shares at July 31,2013 | 3 | 3 |
| Additional paid-in capital | 3,558 | 3,198 |
| Treasury stock, at cost | (6,430) | (4,952) |
| Accumulated other comprehensive income (loss) | (2) | 20 |
| Retained earnings | 6,516 | 5,718 |
| Total stockholders? equity | $3,645 | $3,987 |
a. In the fiscal year ended July 31,2014, Intuit reported net income of $1,019 million. How much did Intuit pay in dividends to its common shareholders?
$Answer
million
b. In the fiscal year ended January 31,2014, Intuit repurchased 23,034 thousand of its common shares. How many shares were issued to employees under stock option plans?
Answer
thousand shares
c. Intuit's issuance of shares for stock option plans increased the Additional paid-in capital balance by $74 million. Was the (average) option exercise price greater or less than the (average) amount Intuit paid to acquire the treasury shares that were reissued?
The (average) option exercise price was Answergreaterless
than the (average) amount intuit paid.
Expert Answer:
