Amoeba Products has 2 million shares currently outstanding at a price of $15 per share. The company declares a 50% stock dividend. How many shares will be outstanding after the dividend is paid?

- 2 mil x .50 = 1 mil (stock dividend) ,, 1 mil + 2 mil = 3 mil shares

After the stock dividend what is the new price per share and what is the new value of the firm?

- The value of the firm was 2 mil x $15 per share, or $30 mil. After the dividend the value will remain the same.

- Price per share = $30 mil / 3 mil share = $10 per share

Now, the question is:

a.) Amoeba Products has 2 million shares currently outstanding at a price of $15 per share. The company declares a 50% stock dividend. Suppose you own 1,000 shares of this company. What is the total shares you own after the stock dividend??? ___________

b.) Using the same information above, what is your total wealth after receiving the stock dividend? _________

Thanks!