Common Stock 900,000 shares authorized,100,000 shares issued $10 par value Answe

Question

Common Stock    900,000 shares authorized,100,000 shares issued $10 par value

Answer the following:

7.    If we have a 4 for 1 stock split, howmany shares will be issued and outstanding after the split_________

8.    If we have a 4 for 1 stock split, howmany shares will be authorized after the split _________

9.    If we have a 4 for 1 stock split, how muchwill the par value be after the split _________

10.                      If we have a 100% stock dividend, how many shares will be issuedand outstanding after the dividend _________

11.                      If we have a 100% stock dividend, how many shares will beauthorized after the dividend _________

12.                      If we have a 100% stock dividend, how much will the par valuebe after the dividend___________________

Explanation / Answer

4 for 1 split implies both authorized and issued shares arequadrupled. 7) 100,000 * 4 = 400,000 8) 900,000 * 4 = 3,600,000 9) Since the market capitalization doesn't change, the stock pricemust be divided by 4. As a result, the par value will be 10 /4 = 2.50 In a stock dividend, shares are given to shareholders from theauthorized reserve. 10) 100,000 * 2 = 200,000 11) 900,000 - 100,000 = 800,000 12) The par value remains unchanged as the total number of shareshas remained unchanged.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.