Oilers Inc. expects to have a capital budget of $500,000 next year. The company wants to maintain a target capital structure with 40% debt and 60% equity, and its forecasted net income is $550,000. If the company follows the residual dividend policy, how much in dividends, if any, will it pay? S250,000 $100,000 $50,000 $150,000 Canadiana Inc. has done extremely well in recent years, and its stock now sells for $100 per share. Management wants to get the price down to a more typical level, which it thinks is $50 per share. What stock split would be required to get to this price, assuming the transaction has no effect on the total market value? Put another way, how many new shares should be given per one old share? 7 O O O O 6 2 Reverse stock splits reduce the number of shares outstanding, and thus have which of the following effects on stock price? A reverse split reduces the number of shares outstanding, and thus reduces share price. A reverse split reduces the number of shares outstanding in proportion to the debt outstanding and thus increases share price, A reverse split reduces the number of shares outstanding, and increases share price. A reverse split has no effect on the number shares outstanding and thus no effect on share price