Haywood and More have a market value balance sheet as shown below. The firm currently has 5,000 shares of stock outstanding at a market price per share of $35.40. Net income is $9,500. The firm has decided to spend $8,000 and pay an extra cash dividend. What will the firm's PE ratio be after this dividend is paid, all else held constant? Ignore taxes.

Question

Haywood and More have a market value balance sheet as shown below. The firm currently has 5,000 shares of stock outstanding at a market price per share of $35.40. Net income is $9,500.  The firm has decided to spend $8,000 and pay an extra cash dividend. What will the firm's PE ratio be after this dividend is paid, all else held constant? Ignore taxes.

Quizplus · Accepted Answer

The Answer of Haywood and More have a market value balance sheet as shown below. The firm currently has 5,000 shares of stock outstanding at a market price per share of $35.40. Net income is $9,500.  The firm has decided to spend $8,000 and pay an extra cash dividend. What will the firm's PE ratio be after this dividend is paid, all else held constant? Ignore taxes.

Haywood and More Have a Market Value Balance Sheet as Shown