FCF Co. has 20,000 shares outstanding and a total market value of $1 million, $300 thousand of
Question:
FCF Co. has 20,000 shares outstanding and a total market value of $1 million, $300 thousand of which is debt and the other $700 thousand is equity. It is planning a 10% stock dividend.
a. What is the stock price before the dividend and what will it be after the dividend?
b. If an investor owns 1000 shares before the dividend, what will the total value of her investment in FCF be before and after the dividend?
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Plan A 10 stock dividend means one new share for every 10 so FCF w...View the full answer
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