How do I solve : How much was the dividend per share? ( Hint : Dividends are not

Question

How do I solve :

How much was the dividend per share? (Hint: Dividends are not paid on treasury stock.

Using the information as follows:

THE SEVENTIES SHOP
Balance Sheet (partial)

How do I solve :

How much was the dividend per share? (Hint: Dividends are not paid on treasury stock.

Using the information as follows:

THE SEVENTIES SHOP
Balance Sheet (partial)

  ($ in thousands)   Stockholders' equity:   Preferred stock, $50 par value $ -           Common stock, $5 par value 11,000      Additional paid-in capital 15,400           Total paid-in capital 26,400      Retained earnings 44,000      Treasury stock (1,900)        Total stockholders' equity $ 68,500   

Explanation / Answer

Retained earnings = 44000

Common stock outstanding = $11000/5 = 2200

Maximum possible dividend per share = 44000/2200 = $20 per share

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