Question

For the fiscal year ended March 31, 2017, a company reported earnings per share of $1.95 and cash dividends per share of $0.30. During fiscal 2018, the company had a 3-for-2 stock split. In the annual report for the fiscal year ended March 31, 2018, earnings per share and cash dividends for fiscal 2017 would be reported, respectively, as: $1.96 and $0.30 $2.91 and $0.45 $1.30 and $0.20 $0.65 and $0.10

Answer 1

The adjusted financial figures after a 3-for-2 stock split for the company's earnings per share would be $1.30, and for cash dividends per share would be $0.20, reflecting the increase in the number of shares.

Step-by-step explanation:

The student asks about the adjusted financial figures following a 3-for-2 stock split. Before the split, the company reported earnings per share (EPS) of $1.95 and cash dividends per share of $0.30 for the fiscal year ended March 31, 2017.

Due to the stock split, these figures need to be adjusted to reflect the increased number of shares. In a 3-for-2 stock split, each shareholder receives 3 shares for every 2 they hold, effectively increasing the number of shares by half. Thus, to find the adjusted EPS and cash dividends, we divide the original amounts by 1.5 (the factor by which the number of shares increased).

Adjusted EPS = $1.95 / 1.5 = $1.30,
Adjusted cash dividends = $0.30 / 1.5 = $0.20.

Therefore, the adjusted earnings per share and cash dividends for fiscal 2017 would be reported in the fiscal 2018 annual report as $1.30 and $0.20, respectively.