a)
To discuss: The effects of equity accounts and per share data of a 20% stock dividend.
Introduction:
A company divides its share into multiple shares and issues to the shareholders as an additional share as per the decisions by the management is termed as stock split.
b)
To discuss: The effects of equity accounts and per share data of a 5-4 stock split.
Introduction:
A company divides its share into multiple shares and issues to the shareholders as an additional share as per the decisions by the management is termed as stock split.
c)
To discuss: The best option which accomplish W Company’s goal of reducing the stock price when maintaining the stable level of retained earnings.
d)
To discuss: The legal constraint which might encourage the firm to take the stock split over stock dividend.
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Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
- Mid-State BankCorp recently declared a 7-for-2 stock split. Prior to the split, the stock sold for $100 per share. If the firm's total market value is unchanged by the split, what will the stock price be following the split? Select one: a. $28.57 b. $25.43 c. $26.29 d. $28.86 e. $35.71arrow_forwardFor the following stock investment, find (a) the total purchase price, (b) the total dividend amount, (c) the capital gain or loss, (d) the total return, and (e) the percentage return. Ignore broker and SEC fees. Number of shares 140 Purchase price per share $17.50 Dividend per share $1.25 Sale price per share $15.05arrow_forwardPresently, your company’s Face Value of Equity Share RO 10 and Market Value of your Share in MSM is RO 25 per share. In order to increase the trading volume and market liquidity of your company stock, will you suggest the management to go for stock split? Explain your management about concept of stock slip with the advantage of splitting the stock of your company with the current scenario.arrow_forward
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