Transcribed Image Text
Phillips Rock and Mud is trying to determine the maximum amountof cash dividends it can pay this year. Assume its balance sheet isas follows: Assets Cash$410,000 Accounts receivable806,000 Fixed assets1,007,000 Totalassets$2,223,000 Liabilities and Stockholders'Equity Accounts payable$542,000 Long term payable307,000 Common stock (305,000 shares at $2 par)610,000 Retained earnings764,000 Totalliabilities and stockholders' equity$2,223,000 a-1. From a legal perspective, what is the maximumamount of dividends per share the firm could pay? (Do notround intermediate calculations and round your answer to 2 decimalplaces.)Dividends per share$2.50a-2. Is this realistic? YesXNob. In terms of cash availability, what is themaximum amount of dividends per share the firm could pay?(Do not round intermediate calculations and round youranswer to 2 decimal places.) Dividends per share$1.34c. Assume the firm earned an 15 percent return onstockholders’ equity last year. If the board wishes to pay out 40percent of earnings in the form of dividends, how much willdividends per share be? (Do not round intermediatecalculations and round your answer to 2 decimalplaces.)*** Need answer to this portion only ***Dividends per share : $