The balance sheet for Pie Crust, Inc., is shown here in market value terms. Ther

Question

The balance sheet for Pie Crust, Inc., is shown here in market value terms. There are 30,000 shares of stock outstanding.

The company has declared a dividend of $1.70 per share. The stock goes ex-dividend tomorrow. Ignore all tax effects.

What is the stock selling for today? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

What will it sell for tomorrow? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

The balance sheet for Pie Crust, Inc., is shown here in market value terms. There are 30,000 shares of stock outstanding.

Explanation / Answer

Pie Crust Inc. All Amounts in $ Current Price of Stock 32.12 $ per share Price of Stock post dividend Equity as given above 963600 Less : Dividends @ 1.70 per 51000 Revised Total Equity 912600 Revised Price of Stock 30.42 $ per share What will the balance sheet look like after the dividends are paid?   Cash 86000   Equity 912600   Fixed assets 826600      Total 912600   Total 912600

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