Dividend Calculations
Response to the following problem:
On January 1, 2009, Oldroyd Corporation had 130,000 shares of common stock issued and outstanding. During 2009, the following transactions occurred (in chronological order):
a. Oldroyd issued 10,000 new shares of common stock.
b. The company reacquired 2,000 shares of stock for use in its employee stock option plan.
c. At the end of the option period, 1,200 shares of treasury stock had been purchased by corporate officials.
Given this information, compute the following:
1. After the foregoing three transactions have occurred, what amount of dividends must Oldroyd Corporation declare in order to pay 50 cents per share? To pay $1 per share?
2. What is the dividend per share if $236,640 is paid?
3. If all 2,000 treasury shares had been purchased by corporate officials through the stock option plan, what would the dividends per share have been, again assuming $236,640 in dividends were paid? (Round to the nearest cent.)