Although there is little empirical evidence to support the contention, there is a widespread belief that an optimal price range exists for stocks$-$meaning that within this range the price$/$earnings ratio and therefore the firm's value will be maximized. Two such tools to use for this purpose are stock dividends and stock splits. They are often used to lower a firm's stock price, and at the same time, to conserve the firm's cash resources. A stock $$ is an action taken by a firm to increase the number of shares outstanding, such as doubling the number of shares outstanding by giving each stockholder two new shares for each one formerly held. A stock $$ J $($ also divides the pie into smaller slices without affecting the fundamental position of the current stockholders but shareholders receive additional shares of stock rather than cash. Stock $$ used on a regular annual basis keep the stock price more or less constrained. Stock $$

$$ are generally used after a sharp price run$-$up to produce a large price reduction. A recent Bloomberg BusinessWeek article states that stock have become a lot less popular in recent years because individual investors have moved from purchasing individual company shares to purchasing shares in mutual funds. Institutional investors are less likely to value stock $$

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Quantitative Problem: After a $4-$for$-1$ stock split, Perry Enterprises paid a dividend of $$2\mathrm{.}50$ per new share, which represents a $7\%$ increase over last year's pre$-$split dividend. What was last year's dividend per share? Round your answer to the nearest cent.

$ $$

Although there is little empirical evidence to support the contention, there is a widespread belief that an optimal price range exists for stocks$-$meaning that within this range the price$/$earnings ratio and therefore the firm's value will be maximized. Two such tools to use for this purpose are stock dividends and stock splits. They are often used to lower a firm's stock price, and at the same time, to conserve the firm's cash resources. A stock $$ is an action taken by a firm to increase the number of shares outstanding, such as doubling the number of shares outstanding by giving each stockholder two new shares for each one formerly held. A stock $$ J $($ also divides the pie into smaller slices without affecting the fundamental position of the current stockholders but shareholders receive additional shares of stock rather than cash. Stock $$ used on a regular annual basis keep the stock price more or less constrained. Stock $$

$$ are generally used after a sharp price run$-$up to produce a large price reduction. A recent Bloomberg BusinessWeek article states that stock have become a lot less popular in recent years because individual investors have moved from purchasing individual company shares to purchasing shares in mutual funds. Institutional investors are less likely to value stock $$

$$

Quantitative Problem: After a $4-$for$-1$ stock split, Perry Enterprises paid a dividend of $$2\mathrm{.}50$ per new share, which represents a $7\%$ increase over last year's pre$-$split dividend. What was last year's dividend per share? Round your answer to the nearest cent.

$ $$

Although there is little empirical evidence to support the contention, there is a widespread belief that an optimal price range exists for stocks$-$meaning that within this range the price$/$earnings ratio and therefore the firm's value will be maximized. Two such tools to use for this purpose are stock dividends and stock splits. They are often used to lower a firm's stock price, and at the same time, to conserve the firm's cash resources. A stock $$ is an action taken by a firm to increase the number of shares outstanding, such as doubling the number of shares outstanding by giving each stockholder two new shares for each one formerly held. A stock $$ J $($ also divides the pie into smaller slices without affecting the fundamental position of the current stockholders but shareholders receive additional shares of stock rather than cash. Stock $$ used on a regular annual basis keep the stock price more or less constrained. Stock $$

$$ are generally used after a sharp price run$-$up to produce a large price reduction. A recent Bloomberg BusinessWeek article states that stock have become a lot less popular in recent years because individual investors have moved from purchasing individual company shares to purchasing shares in mutual funds. Institutional investors are less likely to value stock $$

$$

Quantitative Problem: After a $4-$for$-1$ stock split, Perry Enterprises paid a dividend of $$2\mathrm{.}50$ per new share, which represents a $7\%$ increase over last year's pre$-$split dividend. What was last year's dividend per share? Round your answer to the nearest cent.

$ $$