14. Ch. 13 Stock dividends and stock splits Companies sometimes employ stock splits to bring down the price of its shares so that the stock is more attractive to potential investors. Consider the case of Cold Duck Manufacturing Inc.: Cold Duck Manufacturing Inc. currently has 20,000 shares of common stock outstanding. Its management believes that its current stock price of $110 per share is too high. The company is planning to conduct a 3-for-1 stock split. If Cold Duck Manufacturing Inc. 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 before and after the split-should be per share. The Andre Group is one of Cold Duck's leading competitors. Andre's market intelligence research team has learned of Cold Duck's stock split plans, and is considering paying a stock dividend to its own shareholders. As a result, executives at Andre decide to offer stock dividends to its shareholders. The Andre Group currently has 2,200,000 shares of common stock outstanding. If Andre pays a 5% stock dividend, how many total shares of common stock will be outstanding after the stock dividend? 1,963,500 shares 2,194,500 shares O 2,772,000 shares 2,310,000 shares