Murphy's Has 10,000 Shares Outstanding with a Par Value of £1.00

question 29

Multiple Choice

Murphy's has 10,000 shares outstanding with a par value of £1.00 per share.The market value is £8 per share.The statement of financial position shows £32,500 in the additional paid in capital account,£10,000 in the ordinary equity account and £42,700 in the retained earnings account.The firm just announced a 10% (small) stock dividend.What will the market price per share be after the dividend?

• A)£7.20
• B)£7.27
• C)£7.33
• D)£8.00
• E)£8.80

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Definitions:

Government Purchases

Expenditures by the government sector on goods and services intended to satisfy public consumption and investment demands.

Inventory

The total amount of goods and materials held in stock by a business, warehouse, or store.

Gross Domestic Product

Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a certain period of time.