Suppose that you own 1,000 shares of Nocash Corp. and the company is about to pay a
Question:
Suppose that you own 1,000 shares of Nocash Corp. and the company is about to pay a 25% stock dividend. The stock currently sells at $100 per share.
a. What will be the number of shares that you hold after the stock dividend is paid?
b. What will be the total value of your equity position after the stock dividend is paid?
c. What will be the number of shares that you hold if the firm splits five for four instead of paying the stock dividend?
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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a 1000 125 1250 shares b Price per share will fall to 100125 80 Initial value of ...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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