A market value balance sheet shows cash of $91,000; fixed assets of $327,000, and equity of $418,000.There are 16,000 shares of stock outstanding.The company has declared a dividend of $.82 per share.The stock goes ex-dividend tomorrow.Ignore any tax effects.What will be the firm's market equity value after the dividend is paid?
A)$372,020
B)$404,880
C)$419,560
D)$418,000
E)$397,810

Question

Quizplus · Accepted Answer

The market equity value after the dividend is paid is calculated by subtracting the total dividend payout from the current equity value. The total dividend payout is 16,000 shares * $0.82 = $13,120. Therefore, the market equity value after the dividend is $418,000 - $13,120 = $404,880.

A Market Value Balance Sheet Shows Cash of $91,000; Fixed