Question
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
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