Deck 16: Dividends and Other Payouts

Question 1

Which one of these can a shareholder use to alter the dividend policy of a firm?

A)Homemade dividend
B)Stock split
C)Reverse stock split
D)Stock repurchase
E)Stock dividend

Answer 1

Homemade dividend

Question 2

How frequently do dividend-paying firms in the United States generally pay regular cash dividends?

A)Annually
B)Semiannually
C)Quarterly
D)Monthly
E)Biannually

Answer 2

Quarterly

Question 3

Payments made out of a firm's earnings to its owners in the form of cash or stock are called

A)stock splits.
B)distributions.
C)dividends.
D)payments-in-kind.
E)share repurchases.

Answer 3

dividends.

Question 4

Which one of these actions is most apt to affect the total value of a stockholder's investment in the firm?

A)Enacting a two-for-one stock split
B)Forgoing a positive NPV project in order to increase the dividend amount
C)Paying a special dividend
D)Enacting a five-for-three reverse stock split
E)Repurchasing shares

Question 5

The dividend amount divided by the earnings per share amount is referred to as the dividend

A)yield.
B)per share.
C)payment.
D)payout.
E)declaration.

Question 6

The date before which a new purchaser of stock is entitled to receive a declared dividend,but on or after which she does not receive the dividend,is called the ________ date.

A)ex-dividend
B)ex-rights
C)record
D)payment
E)declaration

Question 7

On the date of record,the stock price drop related to the dividend is

A)a full adjustment for the dividend payment.
B)a partial adjustment for the dividend payment because of the tax effect.
C)zero because the adjustment occurs on the ex-dividend date.
D)zero because the adjustment occurs on the payment date.
E)generally greater than the dividend amount.

Question 8

A cash payment made by a firm to its owners when some of the firm's assets are sold off is called a(n)

A)extra cash dividend.
B)special dividend.
C)regular cash dividend.
D)liquidating dividend.
E)share repurchase.

Question 9

A ________ is an alternative method to cash dividends that is used to distribute a firm's earnings to shareholders.

A)merger
B)reverse stock split
C)payment-in-kind
D)share repurchase
E)stock split

Question 10

A cash payment made by a firm to its owners in the normal course of business is called a(n)

A)share repurchase.
B)liquidating dividend.
C)special dividend.
D)regular cash dividend.
E)extra cash dividend.

Question 11

If you want to receive the recently declared dividend on ABG stock,you must purchase your shares ________ or more business day(s)prior to the date of record.

A)four
B)one
C)two
D)three
E)five

Question 12

Which one of these statements is correct regarding large U.S.firms for the period 2004 to 2014?

A)Common dividends outpaced share repurchases for the majority of the years during the period.
B)Share repurchases tend to be steadier from year to year than are common dividends.
C)Both common dividends and share repurchases were lower in 2014 than they were in 2004.
D)Corporate earnings tend to be more volatile than either stock dividends or repurchases.
E)Common dividends decreased more than share repurchases during the period 2008 to 2009.

Question 13

The indifference policy advocates that

A)dividends are irrelevant.
B)firms are indifferent to dividend policy but stockholders are not.
C)stockholders are indifferent to dividend policy only as long as dividends are held constant.
D)dividend policy is irrelevant as long as the firm's investment policy is modified for dividend changes.
E)dividend policy is irrelevant.

Question 14

The date on which the board of directors passes a resolution authorizing payment of a dividend to the shareholders is the ________ date.

A)ex-rights
B)ex-dividend
C)record
D)payment
E)declaration

Question 15

The date on which the firm mails out its declared dividends is called the

A)ex-dividend date.
B)ex-rights date.
C)date of payment.
D)date of record.
E)declaration date.

Question 16

The date by which a stockholder must be registered on the firm's roll as having share ownership in order to receive a declared dividend is called the

A)ex-dividend date.
B)date of record.
C)ex-rights date.
D)declaration date.
E)date of payment.

Question 17

Alicia purchased 100 shares of GT stock on Wednesday,July 7^th.Nick purchased 100 shares of GT stock on Thursday,July 8^th.GT declared a dividend on June 20^th to shareholders of record on July 12^th and payable on August 1^st.Which one of the following statements concerning the dividend paid on August 1^st is correct given this information?

A)Neither Alicia nor Nick are entitled to the dividend.
B)Nick is entitled to the dividend but Alicia is not.
C)Alicia is entitled to the dividend but Nick is not.
D)Both Alicia and Nick are entitled to the dividend.
E)Both Alicia and Nick are entitled to a pro rata share of the dividend.

Question 18

Payments made by a firm to its owners from sources other than current or accumulated earnings are called

A)distributions.
B)interest payments.
C)share repurchases.
D)payments-in-kind.
E)stock splits.

Question 19

Which one of these increases a firm's number of shares outstanding without changing its owners' equity?

A)Share repurchase
B)Tender offer
C)Special dividend
D)Stock split
E)Liquidating dividend

Question 20

All else equal,the market value of a stock will tend to decrease by roughly the amount of the

A)pretax dividend amount on the ex-dividend date.
B)aftertax dividend amount on the ex-dividend date.
C)pretax dividend amount on the declaration date.
D)pretax dividend amount on the date of payment.
E)aftertax dividend amount on the date of payment.

Question 21

Shareholders are more apt to prefer a high dividend payout if a firm

A)has high flotation costs.
B)has a high rate of growth which requires additional funding.
C)offers high capital gains that are taxed at a favorable rate.
D)has lower tax rates than the shareholder.
E)will spend the funds on a high-premium acquisition if the dividend is not paid.

Question 22

Which of these are common characteristics of a tender offer?
I.The offer can be cancelled if less than the desired number of shares are offered.
II.Sellers are unaware that the buyer is the issuer of the security.
III.The offers made by the sellers determine the price.
IV.The offer price is generally greater than the market price.

A)II and III only
B)I and IV only
C)I,II,and IV only
D)III and IV only
E)II,III,and IV only

Question 23

Of the following factors,which one is considered to be the primary factor affecting a firm's dividend decision?

A)The personal taxes company stockholders incur on dividend distributions
B)Maintaining consistency with the historical dividend policy
C)Attracting retail investors
D)Attracting institutional investors
E)Sustainable changes in earnings

Question 24

Agency costs provide justification for

A)higher dividends over lower dividends.
B)stock repurchases over cash dividends.
C)stock splits rather the stock repurchases.
D)issuing shares rather than repurchasing shares.
E)stock dividends over cash dividends.

Question 25

If all clientele groups are currently satisfied,then

A)all future cash dividends should be in the form of stock dividends.
B)changes in a single company's dividend policy will have no effect on the company's market value.
C)companies can increase their market value by increasing their current dividends.
D)all future cash distributions should be in the form of stock repurchases.
E)all investors are taxed equally on their dividend income and capital gains.

Question 26

Behavioral finance supports the

A)replacement of cash dividends with stock dividends.
B)simultaneous payment of cash dividends along with stock repurchases.
C)payment of dividends rather than stock repurchases.
D)movement to end cash dividends and just have investors buy and sell shares to meet their cash needs.
E)increased use of stock splits rather than the distribution of cash in any form.

Question 27

Companies are more apt to choose repurchases over dividends if doing so will enable them to
I.take advantage of a market undervaluation of their shares.
II.maintain or increase the value of executive stock options.
III.offset the dilution created by the exercise of executive stock options.
IV.distribute revenue increases that are considered to be temporary or short-term in nature.

A)I and II only
B)II and IV only
C)I,II,and IV only
D)II,III,and IV only
E)I,II,III,and IV

Question 28

Which one of these statements is correct regarding various types of investors?

A)Taxpayers in high tax brackets tend to prefer dividends over capital gains.
B)Pension funds are taxed at a low rate of 10 percent on both dividends and capital gains.
C)Corporations can exclude at least 70 percent of their dividend income from taxes.
D)Pension funds pay taxes on capital gains but not on dividends.
E)Corporations can exclude at least 70 percent of both their dividend income and capital gains from taxes.

Question 29

The argument that selling stock involves too much leeway is the

A)primary argument for implementing homemade dividends.
B)primary argument against homemade dividends.
C)principal reason firms do reverse stock splits.
D)behavioral finance argument in favor of high dividends.
E)behavioral finance argument in favor of low dividends.

Question 30

Which of the following tend to keep dividends low?
I.Potential for companies to use excess cash on negative NPV projects
II.Restrictive terms contained in bond indenture agreements
III.Manager's desire to maintain constant dividends over time
IV.Flotation costs

A)II and III only
B)I and IV only
C)II,III,and IV only
D)I,II,and III only
E)I,II,III,and IV

Question 31

The fact that flotation costs can be significant is justification for

A)maintaining a high dividend policy.
B)maintaining a low dividend policy and rarely issuing extra dividends.
C)maintaining a constant dividend policy even when profits decline significantly.
D)a firm to issue larger dividends than its closest competitors.
E)a firm to maintain a constant dividend policy even if it frequently has to issue new shares of stock to do so.

Question 32

The observed empirical fact that stocks attract particular investors based on the firm's dividend policy and the resulting tax impact on investors is called the

A)clientele effect.
B)efficient markets hypothesis.
C)information content effect.
D)MM Proposition I.
E)MM Proposition II.

Question 33

Which one of these statements is true?

A)Managers tend to benefit more from decreasing a firm's size rather than increasing its size.
B)Dividend payout policies are always set according to the best interest of the shareholders.
C)Acquisitions are generally believed to be an excellent alternative to dividends.
D)The IRS code discourages the accumulation of surplus cash thereby encouraging dividends.
E)Current tax law favors dividends over repurchases from the stockholders' point of view.

Question 34

From a tax-paying shareholder's point of view,a stock repurchase

A)is equivalent to a stock split.
B)is more desirable than a cash dividend.
C)is more highly taxed than a cash dividend.
D)avoids all taxation.
E)creates a tax liability even if the investor does not participate in the repurchase.

Question 35

The information content of a regular dividend increase generally signals that

A)management believes the future earnings of the firm will be strong.
B)the firm has recently sold a subsidiary.
C)the firm has a one-time surplus of cash.
D)the firm has more cash than it needs due to declining sales.
E)future dividends will be lower.

Question 36

Observation and research shows that

A)dividends have almost been eliminated due to increased stock repurchases.
B)during the year 1979,about two-thirds of dividends were paid to individuals with a marginal tax rate of 15 percent or less.
C)the largest corporations have been holding their dividends constant over the last 20 years.
D)for the period 1980 to 2012,aggregate dividends averaged about 30 percent of aggregate earnings.
E)the percentage of corporations paying dividends has increased since the Year 2002.

Question 37

Which one of the following is an argument in favor of a low dividend policy?

A)Few,if any,positive net present value projects are available to the firm.
B)Only the gain on a sale of stock is taxed.
C)Agency costs
D)Investor desire for current income
E)Lack of investor self-control

Question 38

How can management best signal the market that a firm is doing well?

A)Distribute a liquidating dividend
B)Issue additional shares of stock
C)Increase the regular dividend amount
D)Issue stock to pay the regular dividend
E)Replace the regular dividend with a stock dividend

Question 39

Which one of these statements is true?

A)Transaction and issue costs have no effect on dividend policy.
B)If the shareholders of an acquired company receive shares in the acquirer rather than cash,they avoid paying taxes.
C)Stock dividends provide shares that can be used for the exercise of shares under an employee stock option plan.
D)Individual investors desiring current income need to invest solely in high-dividend stocks.
E)In the United States,stock sales have exceeded stock repurchases every year since 2008.

Question 40

Quick Mart has been paying a quarterly dividend of $1.20 a share.Which of the following are valid reasons for the firm to reduce or eliminate these dividends?
I.The firm is on the verge of violating a bond restriction.
II.The firm wants to save cash for an acquisition with a 40 percent premium.
III.The firm can raise new capital easily at a very low cost.
IV.Congress just changed the tax laws eliminating all taxes on capital gains.

A)I and IV only
B)II and IV only
C)II,III,and IV only
D)I,II,and IV only
E)I,II,III,and IV

Question 41

In a reverse stock split,

A)the number of shares outstanding increases and owners' equity decreases.
B)the number of shares outstanding decreases but owners' equity is unchanged.
C)shareholders make a cash payment to the firm.
D)the firm buys back existing shares of stock on the open market.
E)the firm sells new shares of stock on the open market.

Question 42

Assume the stockholders of EX stock are in the 25 percent tax bracket.The closing price of the stock today was $54.15 a share.The firm pays a quarterly dividend of $1.22 per share.What is the expected opening price of the stock tomorrow if tomorrow is an ex-dividend date?

A)$52.63
B)$55.53
C)$54.18
D)$53.61
E)$53.24

Question 43

A firm has a market value equal to its book value,excess cash of $400,other assets of $9,200,and equity of $9,800.The firm has 500 shares of stock outstanding and net income of $420.The firm has decided to spend all of its excess cash on a share repurchase program.How many shares of stock will be outstanding after the stock repurchase is completed?

A)440 shares
B)445 shares
C)480 shares
D)910 shares
E)915 shares

Question 44

Lisa purchased 200 shares of ABC stock on May 15^th.On May 21^st,she purchased another 200 shares,and then on May 22^nd,she purchased 200 additional shares.The company declared a dividend of $1.47 a share on May 5^th to holders of record on Friday,May 23^rd.The dividend is payable on May 31^st.How much dividend income will she receive on May 31^st from ABC?

A)$0
B)$294
C)$234
D)$468
E)$588

Question 45

A fixed repurchase strategy

A)increases a company's market value each time shares are repurchased.
B)can force firms into making negative NPV investments.
C)requires a trustee to oversee and monitor all repurchases.
D)allows managers to repurchase shares only when they believe those shares are undervalued.
E)is easy to verify in a timely manner.

Question 46

The highest and lowest prices at which a stock has traded over a period of time is called its

A)bid-ask spread.
B)average price.
C)closing price.
D)opening price.
E)trading range.

Question 47

A sensible payout policy

A)sets dividends at a level just equal to the amount of new equity that can be raised annually.
B)sets dividends based on net income,not cash flows.
C)consistently varies its target payout ratio on an annual basis.
D)pays out all free cash flows over time.
E)cuts positive NPV investments,if needed,to steadily increase its dividend.

Question 48

Litner's model supports the belief that

A)dividends are decreasing in importance.
B)corporations smooth dividends.
C)dividends tend to be more volatile than earnings.
D)dividend increases tend to lead earnings increases.
E)dividends and earnings rise and fall in sync with each other.

Question 49

A reverse stock split associated with a cash buyout is sometimes used as a means of

A)decreasing the liquidity of a stock.
B)decreasing the market value per share of stock.
C)increasing the number of stockholders.
D)raising cash from current stockholders.
E)eliminating small stockholders.

Question 50

Reverse stock splits can be used to

A)adjust the debt-equity ratio such that it falls within a preferred range.
B)increase the excess cash held by a firm.
C)increase both the number of shares outstanding and the market price per share simultaneously.
D)increase the total equity of a firm.
E)avoid delisting.

Question 51

A firm has a market value equal to its book value,excess cash of $500,other assets of $6,200,and equity of $8,200.The firm has 400 shares of stock outstanding and net income of $680.What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase?

A)$1.44
B)$.94
C)$.86
D)$1.81
E)$1.53

Question 52

Which statement is true?

A)Dividends are evenly distributed by a wide range of companies in various industries and of varying sizes.
B)Unanticipated changes in dividends can affect stock prices.
C)Managers never cut dividends.
D)Cash dividends and stock repurchases have increased in nominal terms but decreased in real terms.
E)Managers tend to increase dividends rapidly when transitory earnings rise.

Question 53

In respect to a balance sheet,a stock split will

A)not affect the total value of any of the equity accounts.
B)increase the total value of the common stock account.
C)decrease the total book value of owners' equity.
D)increase the value of the capital in excess of par value account.
E)decrease the value of the retained earnings account.

Question 54

Eisley's has a market value equal to its book value,excess cash of $528,other assets of $13,900,and equity of $9,900.The firm has 600 shares of stock outstanding and net income of $1,450.Assume the firm uses all of its excess cash for a stock repurchase.What will the price per share be after the repurchase?

A)$16.50
B)$17.80
C)$18.00
D)$15.90
E)$17.67

Question 55

Assume the stockholders of GPO stock are in the 15 percent tax bracket.The closing price of the stock today was $32.09 a share.The firm pays a quarterly dividend of $1.20 per share.What is the expected opening price of the stock tomorrow if tomorrow is an ex-dividend date?

A)$32.09
B)$30.71
C)$32.14
D)$27.61
E)$31.07

Question 56

Leslie owns 600 shares of Good Manners stock.The company will pay per share dividends of $1.42 1 year from now and $1.48 2 years from now.Leslie does not want any dividend income 1 year from now but does want as much dividend income as possible the following year.She plans on creating her own homemade dividends and can borrow and lend at 7 percent.Ignoring taxes,what will her homemade dividend per share be 2 years from now?

A)$2.97
B)$2.90
C)$2.46
D)$3.00
E)$1.48

Question 57

On May 18^th,you purchased 900 shares of LKM stock.On June 1^st,you sold 100 shares of this stock for $32 a share.You sold an additional 200 shares on July 6^th at a price of $34.50 a share.The company declared a per share dividend of $.33 on June 20^th to holders of record as of Friday,July 8^th.This dividend is payable on July 29^th.How much dividend income will you receive on July 29^th as a result of your ownership of LKM stock?

A)$0
B)$198
C)$240
D)$264
E)$297

Question 58

New Built wants to repurchase 15,000 of its shares at $32 a share through a tender offer.Shareholders responded by offering 18,500 shares.Assume you are a shareholder and offered your 400 shares as part of the shareholder response.How many of your shares should you expect New Built to purchase?

A)0 shares
B)400 shares
C)348 shares
D)324 shares
E)279 shares

Question 59

Luis owns 300 shares of a stock that plans to pay a special $4.65 per share dividend 1 year from today and a final $.32 per share dividend 2 years from today.He does not desire any dividend income in 2 years but wants all of his dividends in 1 year.He can borrow and lend at 9 percent.Ignoring taxes,what will be his total homemade dividend in 1 year?

A)$1,306.93
B)$1,491.00
C)$1,208.15
D)$1,616.55
E)$1,845.15

Question 60

Which statement is correct?

A)Total owner's equity decreases with a small stock dividend but not with a large stock dividend.
B)A large stock dividend increases both the common stock and the capital in excess of par value account values.
C)Stock dividends of 40 percent or less are called small stock dividends.
D)Stock splits and stock dividends have been definitively proven to have no effect on a firm's market value.
E)A small stock dividend increases both the par value per share and the value of the capital in excess of par value account.

Question 61

KLT just paid an annual dividend of $1.62 a share.The firm has a target payout ratio of 0.55 and a speed of adjustment value of 0.4.What is the expected value of next year's annual dividend if the firm expects its earnings per share to be $3.98?

A)$2.50
B)$1.85
C)$1.74
D)$1.92
E)$1.71

Question 62

Bruno's has 13,000 shares of stock outstanding with a par value of $1 per share and a market value of $38.29 per share.The balance sheet shows $13,000 in the common stock account,$78,300 in the capital in excess of par value account,and $82,500 in retained earnings.The firm just announced a large stock dividend of 40 percent.What will be the balance in the capital in excess of par value account after the dividend?

A)$272,208
B)$277,408
C)$145,300
D)$78,300
E)$91,300

Question 63

Jensen's has 18,000 shares of stock outstanding with a par value of $1 per share and a market price of $32.30 a share.The balance sheet shows $18,000 in the common stock account,$109,600 in the capital in excess of par value account,and $78,200 in the retained earnings account.The firm just announced a stock split of five-for-three.What will be the balance in the capital in excess of par value account after the split?

A)$138,700
B)$94,560
C)$458,200
D)$109,600
E)$458,440

Question 64

Robinson's has 12,000 shares of stock outstanding with a par value of $1 per share and a market price of $24.20 a share.The firm just announced a four-for-three stock split.What will the market price per share be after the split?

A)$18.15
B)$17.65
C)$18.25
D)$30.46
E)$32.27

Question 65

AJ's has 12,400 shares of stock outstanding with a par value of $1 per share and a market price of $31 a share.The balance sheet shows $12,400 in the common stock account,$67,200 in the capital in excess of par value account,and $59,300 in the retained earnings account.The firm just announced an upcoming five-for-four stock split.What will be the value of the common stock account after the split?

A)$9,920
B)$12,500
C)$15,500
D)$12,400
E)$15,000

Question 66

The Robert's Co.just paid an annual dividend of $1.49 a share.The firm has a target payout ratio of 0.38 and a speed of adjustment value of 0.7.What is the expected value of next year's annual dividend if the firm expects its earnings per share to be $4.87?

A)$1.66
B)$1.70
C)$1.95
D)$1.98
E)$1.74

Question 67

A stock currently sells for $65.70 a share.What type of stock split would be best if the stock's proper trading range centers on $22 a share?

A)two-for-five reverse stock split
B)one-for-three reverse stock split
C)two-for-three reverse stock split
D)five-for-two stock split
E)three-for-one stock split

Question 68

The Retail Outlet has 6,000 shares of stock outstanding with a par value of $1 per share.The current market value of the firm is $120,000.The company just announced a one-for-three reverse stock split.What will the par value per share be after the split?

A)$.33
B)$.25
C)$1.00
D)$3.00
E)$4.00

Question 69

The Uptowner has 11,000 shares of stock outstanding with a par value of $1 per share and a market value of $14 per share.The balance sheet shows $11,000 in the common stock account,$60,300 in the capital in excess of par value account,and $72,100 in the retained earnings account.The firm just announced a large stock dividend of 65 percent.What is the value of the common stock account after the dividend?

A)$17,750
B)$18,500
C)$18,150
D)$11,000
E)$14,000

Question 70

Auto Supply has 54,200 shares of stock outstanding with a par value of $1 per share and a market value of $6.20 a share.The company just announced a two-for-nine reverse stock split.What will be the par value per share after the split?

A)$.22
B)$.44
C)$1.00
D)$2.50
E)$4.50

Question 71

Edie's has 14,500 shares of stock outstanding with a par value of $1 per share and a market value of $5.80 a share.What type of stock split would be best if the stock's proper trading range centers on $16 a share?

A)Stock split of eight-for-three
B)Stock split of eleven-for-four
C)Reverse stock split of three-for-one
D)Reverse stock split of three-for-eight
E)Reverse stock split of four-for-eleven

Question 72

Pete's Pets has 18,500 shares of stock outstanding with a par value of $1 per share and a market price of $21 a share.The firm just announced a three-for-two stock split.How many shares of stock will be outstanding after the split?

A)12,000 shares
B)14,000 shares
C)27,750 shares
D)22,250 shares
E)29,250 shares

Question 73

Corner Mart has 130,000 shares of stock outstanding with a par value of $1 per share and a market value of $38.40 per share.The firm just announced a small stock dividend of 15 percent.What will be the market price per share after the dividend?

A)$32.90
B)$33.39
C)$38.40
D)$41.08
E)$44.16

Question 74

Pluto's has 15,300 shares of stock outstanding with a par value of $1 per share and a market value of $22.10 per share.The balance sheet shows $324,800 in the capital in excess of par account,$15,300 in the common stock account,and $174,700 in the retained earnings account.The firm just announced a small stock dividend of 12 percent.What will be the balance in the retained earnings account after the dividend?

A)$129,700.00
B)$134,124.40
C)$128,309.18
D)$132,360.00
E)$128,509.90

Question 75

Cat's has 41,800 shares of stock outstanding with a par value of $1 per share and a market value of $13.57 per share.The balance sheet shows $41,800 in the common stock account,$247,900 in the capital in excess of par value account,and $308,500 in retained earnings.The firm just announced a large stock dividend of 50 percent.What is the value of the retained earnings account after the dividend?

A)$287,600
B)$268,500
C)$24,887
D)$45,787
E)$308,500

Question 76

You currently own 300 shares of Hanover Co.The stock closed at a price of $32.09 a share today.Tomorrow morning,a stock dividend of 8 percent will occur.What will be the change in the value of your investment tomorrow assuming there are no other factors affecting the market price of the stock?

A)$0
B)−$528.60
C)$399.70
D)−$770.16
E)$770.16

Question 77

The Retail Outlet has 17,500 shares of stock outstanding with a par value of $1 per share.The current book value of the firm is $387,800 and the balance in the capital in excess of par value account is $146,300.The company just announced a four-for-three stock split.What will be the common stock account balance after the split?

A)$11,000
B)$13,125
C)$23,333
D)$14,500
E)$17,500

Question 78

Winslow Co.has 74,200 shares of stock outstanding at a market price of $52 a share.The company just announced a five-for-two stock split.How many shares of stock will be outstanding after the split?

A)29,680 shares
B)32,320 shares
C)74,200 shares
D)180,500 shares
E)185,500 shares

Question 79

Men's Place has 21,000 shares of stock outstanding with a par value of $1 per share and a market value of $27.18 per share.The balance sheet shows $21,000 in the common stock account,$187,600 in the capital in excess of par value account,and $218,200 in the retained earnings account.The firm just announced a large stock dividend of 35 percent.What is the market value per share after the dividend?

A)$27.18
B)$20.13
C)$20.25
D)$19.50
E)$19.67