Coldwater Fishery is considering a 1-for-4 reverse stock split. Its stock is currently selling for $15 per

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Coldwater Fishery is considering a 1-for-4 reverse stock split. Its stock is currently selling for $15 per share. Coldwater plans to pay a dividend equal to $0.15 per share after the split.

But it would like to pay an equivalent dividend per share even if the split does not take place.

(a) What will the price of the stock be immediately after the stock split?

(b) What should the per share dividend be if Coldwater doesn’t split the stock?

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Cfin4 Plus Coursemate Printed Access Card 2014

ISBN: 9781285434544

1st Student Edition

Authors: Scott Besley, Eugene F. Brigham

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