9. 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 Purple Turtle Group: Purple Turtle Group currently has 20,000 shares of common stock outstanding. Its management believes that its current stock price of $105 per share is too high. The company is planning to conduct a 4-for-1 stock split. If Purple Turtle Group declares a 4-for-1 stock split, what will be 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. Happy Frog Inc. is one of Purple Turtle's leading competitors. Happy Frog's market intelligence research team has learned of Purple Turtle's stock split plans, and is considering paying a stock dividend in response. As a result, executives at Happy Frog decide to pay stock dividends to its shareholders. A stock dividend is another way of keeping the stock price from going too high. Happy Frog Inc. currently has 2,200,000 shares of common stock outstanding. If Happy Frog pays a 8% stock dividend, how many new shares will the firm issue to its existing shareholders? 176,000 shares 123,200 shares 132,000 shares 167,200 shares