Problem 10-03 Jersey Medical earns $8.50 a share, sells for $120, and pays a $8 per share
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Problem 10-03
Jersey Medical earns $8.50 a share, sells for $120, and pays a $8 per share dividend. The stock is split two for one and a $4 per share cash dividend is declared.
- What will be the new price of the stock? Round your answer to the nearest dollar. ____??
If the firm's total earnings do not change, what is the payout ratio before and after the stock split? Round your answers to one decimal place.
- Payout ratio before the split: %______???
- Payout ratio after the split: %____??
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