Wilson Pharmaceuticals’ stock has done very well in the market during the last three years. It has risen from $55 to $80 per share. The firm’s current statement of stockholders’ equity is as follows:...


Wilson Pharmaceuticals’ stock has done very well in the market during the last three years. It has risen from $55 to $80 per share. The firm’s current statement of stockholders’ equity is as follows:


































Common stock (5 million shares issued at par value of $10 per share)$50,000,000
Paid-in capital in excess of par13,000,000
Retained earnings57,000,000
Net worth$120,000,000



a-1.How many shares would be outstanding after a two-for-one stock split?(Do not round intermediate calculations. Input your answer in millions (e.g., $1.23 million should be entered as "1.23").)








a-2.What would be its par value?(Do not round intermediate calculations and round your answer to 2 decimal places.)








b-1.How many shares would be outstanding after a three-for-one stock split?(Do not round intermediate calculations. Input your answer in millions (e.g., $1.23 million should be entered as "1.23").)








b-2What would be its par value?(Do not round intermediate calculations and round your answer to 2 decimal places.)








c.Assume that Wilson earned $11 million. What would its earnings per share be before and after the two-for-one stock split? After the three-for-one stock split?(Do not round intermediate calculations and round your answers to 2 decimal places.)








d.What would be the price per share after the two-for-one stock split? After the three-for-one stock split? (Assume that the price-earnings ratio of 36.36 stays the same.)



Answer C, B-2, and D



Jun 04, 2022
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