You purchased 200 shares of H2O Corporation stock at a price of $20. Consider each of the

Question:

You purchased 200 shares of H2O Corporation stock at a price of $20. Consider each of the following announcements separately. What will the price of the stock be after each change? How many shares will you own? What will be the total value of your holdings (value of stock plus any income)?

a. The firm announces a 10 percent stock dividend.

b. The firm announces a 2-for-1 stock split

c. The firm announces a $0.50 per share dividend (in your answer use the price of the stock on the ex-dividend date).

d. The firm announces it will repurchase 10 percent of its shares; you do not offer to sell any of your shares.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A 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...