Assume that you own 14,000 shares of Briant Inc.s common stock and that you currently receive cash

Question:

Assume that you own 14,000 shares of Briant Inc.’s common stock and that you currently receive cash dividends of $1.68 per share per year.

Required:

a. If Briant Inc. declared a 5% stock dividend, how many shares of common stock would you receive as a dividend?

b. Calculate the cash dividend per share amount to be paid after the stock dividend that would result in the same total cash dividend (as was received before the stock dividend).

c. If the cash dividend remained at $1.68 per share after the stock dividend, what per share cash dividend amount without a stock dividend would have accomplished the same total cash dividend?

d. Why might a company consider having a dividend policy of paying a $0.30 per share cash dividend every year and also issuing a 5% stock dividend every year?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... 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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