The Smart Guy Rental Company has 750 shares outstanding at a market price of $12 a share.The earnings per share are $1.20.The firm has current assets of $4000,net fixed assets of $6000,and total liabilities of $7000.Today,Smart Guy's is paying a cash dividend of $0.50 a share.Ignore taxes.After the dividend,the firm's:
A) earnings per share will be $0.70
B) price-earnings ratio will be 9.58
C) shareholder value per share will be $13.20
D) stock price will be $12.00
E) book value per share will be $4.50
Correct Answer:
Verified
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