Global Traders Has Common Stock Outstanding at a Market Price

question 3

Multiple Choice

Global Traders has common stock outstanding at a market price of $46 per share.The total market value of the firm is $5,754,600.The firm plans on liquidating one of its divisions for $620,000 in cash,after taxes,and distributing the proceeds to the shareholders in the form of a liquidating dividend.What will be the amount per share of that dividend?

• A)$5.197
• B)$4.956
• C)$4.620
• D)$4.708
• E)$4.782

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Definitions:

Consolidated Net Income

The total net income of a parent company and its subsidiaries, after intercompany transactions have been eliminated.

Dividends

When a corporation distributes its profits to the shareholders, often as profit payments.

Operating Activities

Activities that constitute the primary or main activities of an entity, including cash flows from producing and delivering goods and providing services.

Noncontrolling Interest

An ownership interest in a company that is less than 50%, usually reflected as a separate component of equity on a parent company’s balance sheet, representing the portion of its subsidiaries not owned by the parent.