The company Milano Corp. Inc. Has the following Balance Sheet data:
Cash 100.000
Fixed Assets 400.000
Debt: 200.000
Equity 300.000
There are 1.000 shares outstanding.
The company has decided to declare dividends for 50.000, but it's still deciding whether to pay them cash or to make a stock dividend.

Required

Show the Balance sheet after the dividend in both cases
What is the price per share before and after the dividend in the case of cash dividend?
What is the price per share before and after the dividend in the case of stock dividend?
Which would be your choice and why?

Answer rating: 100% (QA)

To determine the impact of the dividend on the balance sheet and the price per share we need to consider the two scenarios cash dividend and stock div... View the full answer