Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Happy Monkey Manufacturing currently has 30,000 shares of common stock outstanding. Its management believes that its current stock price of $100 per share is too

Happy Monkey Manufacturing currently has 30,000 shares of common stock outstanding. Its management believes that its current stock price of $100 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 Happy Monkey Manufacturing declares a 2-for-1 stock split, the price of the companys stock after the split, assuming that the total value of the firms stock remains the same after the split, will be per share.

Hackworth Hardware Company is one of Happy Monkeys leading competitors. Hackworths market intelligence research team shares Happy Monkeys 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 5% stock dividend, what will be the total number of shares outstanding after the stock dividend?

1,328,250 shares

981,750 shares

1,155,000 shares

1,097,250 shares

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Terrorist Finance

Authors: T. Wittig

2011th Edition

0230291848, 978-0230291843

More Books

Students also viewed these Finance questions

Question

compare and contrast orientations to the field, and

Answered: 1 week ago