Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Companies sometimes consider stock splits to bring down the price so that the stock attracts more purchases. Consider the case of Mainway toys Co.: Mainway
Companies sometimes consider stock splits to bring down the price so that the stock attracts more purchases. Consider the case of Mainway toys Co.: Mainway Toys Co. currently has 25,000 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 2 for 1 as described in the animation. If Mainway Toys Co declares a 2-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 alter the split? Mackworth Co is one of Manway Toys Co.'s leading competitors. Hackworth Co.'s market intelligence research team shares Mainway Toys Co's plans of announcing a stock split, influencing the distribution policy makers. Consequently, executives at Hackworth Co decide to offer stock dividends to its shareholders. Hackworth Co. Currenty has 1,300,000 shares of common stock outstanding. If the firm pays a 3% stock dividend, what will be the total number of shares outstanding after the stock dividend
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started