Multiple Choice
Webster United is paying a $1.10 per share dividend today.There are 350,000 shares outstanding with a market price of $25 per share.Ignore taxes.Before the dividend,the company had earnings per share of $1.74.As a result of this dividend,the:
A) retained earnings will decrease by $350,000.
B) retained earnings will increase by $385,000.
C) total firm value will not change.
D) earnings per share will increase to $2.84.
E) price-earnings ratio will be 13.74.
Correct Answer:
Verified
Correct Answer:
Verified
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