Required information

Skip to question

[The following information applies to the questions displayed below.]

Kosmier Company has outstanding 500,000 shares of $50 par value common stock that originally sold for $60 per share. During the three most recent years, the company carried out the following activities in the order presented: declared and distributed a 10 percent stock dividend, declared and paid a cash dividend of $1 per share, declared and distributed a 2-for-1 stock split, and declared and paid a $0.60 per share cash dividend.

c-1. Assume if you were a stockholder who held 100 shares of stock that you purchased four years ago when the market value of the shares was $65, how many shares would you own after the four transactions described above?

c-2. Assume if the market value of the stock was $40 after the four transactions, would you be better or worse off than before the four transactions?