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Botanical Gardens Nursery has 7,500 shares of stock outstanding at a market price of $18 a share. The earnings per share are $1.23. The firm has total assets of $384,000 and total liabilities of $146,000. Today, the firm is paying a quarterly cash dividend of $.22 a share. What will be the earnings per share after the dividend is paid if the tax rate on dividends is 15 percent?

a. $1.01
b. $1.04
c.$1.23
d. $1.17
e. $1.20

Respuesta :

Answer:

earning per share will not change as dividend is not deductible and will not affect the earning. Generally  dividend are liable to the recipient.

Explanation:

Given data:

shares of stock is 7500

market price of share is $18

earning is $1.23

total assets is 384,000

total liabilities is $146000

cash dividend is $.22 per share

earning per share will not change as dividend is not deductible and will not affect the earning. Generally  dividend are liable to the recipient.

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