#3

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 15,000 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 4 for 1 as described in the animation. If Mainway Toy Company declares a 4-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? Fuzzy Muffin Manufacturing Company is $47.50 nway's leading competitors. Fuzzy Muffin Manufacturing Company's market intelligence research team shares Mainway's plans of announ $31.67 k 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 keep outstanding. $190.00 $23.75 ck price from going too high. Fuzzy Muffin currently has 1,300,000 shares of common stock $380.00 If the firm pays a 6% stock dividend, how many shares will the firm issue to its existing shareholders? 70,200 shares 74,100 shares 78,000 shares 62,400 shares