5. 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: Tolbotics 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 stock splits in the ratio of 4 for 1 as described in the animation Ethicale of Stack $12 of Tolbotics Inc. declares a 4-for-1 stock sple, 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? Hackworth Hardware Company is one of Tolboties's leading competitors. Hackworth's market intelligence research team shares Tolboties's plans of announcing a stock split, influencing the distribution policy makers. Consequently, executives at Hackworth decide to offer stock dividends to its shareholders. Hackworth currently has 1,100,000 shares of common stock outstanding, If the firm pays a 4% stock dividend, what will be the total number of shares outstanding after the stock dividend? O 1,144,000 shares 1,029,600 shares 1,201,200 shares 1.430,000 shares Companies with excess cash often employ share repurchase plans in place of or along with cash dividends. Share repurchase plans can help investors liquidate their holdings by selling their stock to the issuing company and earning from capital gains. Consider the case of Gadgetron Company: Gadgetron Company expects to eam $5,700,000 this year. The company currently has 790,000 shares outstanding, and the shares have a per-share market price of $19. Assuming that Gadgetron's price-to-earnings (P/E) ratio remains constant and its earnings are unaffected by a share repurchase transaction, then the company's expected market price per share-If it repurchases 70,000 shares at the current market price-should be Which of these factors are considered an advantage of a stock repurchase? Check all that apply. A repurchase can remove a targe block of stock that is overhanging the market and keeping the per-share price depressed When a firm distributes cash by repurchasing stock, stockholders have the option to either sell or not sell stock The price of the firm's stock might benefit more from cash dividends than from a repurchase