You presently own 1000 shares of a stock at $75 per share. The dividend is $1.68 per share. Management plans a 3:1 stock split. After the stock split is complete, management plans an additional stock dividend of 4%.

a) After the stock split, how many shares would you have and what would the price be?

b) After the stock dividend, how many shares would you have and what would the price be?

c) Briefly explain why management might split the stock.