10. Stock dividends and stock splits Companies sometimes consider stock splits to bring down the price so that the stock attracts more purchases. Consider the following case: Mainway Toy Company currently has 25,000 shares of common stock outstanding. Its management believes that its current stock price of $95 per share is too high. The company is planning to conduct stock splits in the ratio of 3 for 1 as described in the animation. If Mainway Toy Company declares a 3-for-1 stock split, the price of the company's stock after the split, assuming that the total value of the firm's stock remains the same after the split, will be If Mainway Toy Company declares a 3-for-1 stock split, the price of the company's stock after the split, assuming that the total value of the firm's stock remains the same after the split, will be Fuzzy Muffin Manufacturing Company is one of $190.00 leading competitors. Fuzzy Muffin Manufacturing Company's market intelligence research team shares Mainway's plans of announcing a $285.00 influencing the distribution policy makers. Consequently, executives at Fuzzy Muffin decide to offer stock dividends to its shareholders. $31.67 A stock dividend is another way of keeping the outstanding. $380.00 from going too high. Fuzzy Muffin currently has 3,200,000 shares of common stock $47.50 If the firm pays a 7% stock dividend, how many shares will the firm issue to its existing shareholders? If Mainway Toy Company declares a 3-for-1 stock split, the price of the company's stock after the split, assuming that the total value of the firm's stock remains the same after the split, will be Fuzzy Muffin Manufacturing Company is one of Mainway's leading competitors. Fuzzy Muffin Manufacturing Company's market intelligence research team shares Mainway's plans of announcing a stock split, influencing the distribution policy makers. Consequently, executives at Fuzzy Muffin decide to offer stock dividends to its shareholders. A stock dividend is another way of keeping the stock price from going too high. Fuzzy Muffin currently has 3,200,000 shares of common stock outstanding. If the firm pays a 7% stock dividend, how many shares will the firm issue to its existing shareholders? 168,000 shares 246,400 shares 224,000 shares 156,800 shares