Why companies are issuing stock dividend? What are the influential

factors and the impact of it to the business and stockholders point of

view. (2 Marks)

b) The board of directors of ABC Company recently announced a 24% stock

dividend. Assuming that the current stock price is OMR 8 and there are

700,000 total ordinary shares outstanding of OMR 0.600 each.

You are required to determine the following:

i) Determine the market capitalization of the Company before the stock dividend.

ii) Determine the increase in shares outstanding due to a 20% stock dividend.

iii) Determine the new total shares outstanding.

iv) Determine the price per share of the Company after stock dividend.

(3 marks)