ded Assignment |Back to Assignment Attempts: 20. Stock dividends and stock split
ID: 2617722 • Letter: D
Question
ded Assignment |Back to Assignment Attempts: 20. Stock dividends and stock splits Companies sometimes consider stock splits to laihg down the price so that the stock attracts more purchases Average: 12 Aa Aa Consider the following case: Tolbotics Inc. currently has 25,000 shares of common stock outstanding. Its management believes that its current stock price of $90 per share is too high. The company is planning to conduct stock splits in the ratio of 2 for 1 as described in the animation. ctficate of store 0 If Tolbotics Inc. declares a 2-for-1 stock split, the price of the company's stock after the split, assuming that the total value of the firm's stock remains the same after the split, wll be Fuzzy Muffin Manufacturing Company is one of Tobotics's leading If the firm pays a 4% stock dividend, what will competitors. Fuzzy Muffin's market intelligence research team be the total number of shares outständing after shares Tolbotics's plans of announcing a stock split, influencing the stock dividend? the distribution policy makers. Consequently, executives at Fuzzy Muffin decide to offer stock dividends to its shareholders o 3,161,600 shares O 4,160,000 shares O 2,828,800 shares O 3,328,000 shares Fuzzy Muffin currently has 3,200,000 shares of common stock outstanding. ash PyWEN 30,0,13 03 3341 2 Grade t Now Save & ContinueExplanation / Answer
Answer to Question 1.
Current Par Value of Stock = $12
Stock Split = 2 for 1
Price of Company Stock after Stock Split = $12 / 2
Price of Company Stock after Stock Split = $6
Answer to Question 2.
No. of Share Outstanding = 3,200,000 Shares
Stock Dividend Declared = 4%
No. of Share declared as Dividend = 3,200,000 * 4%
No. of Share declared as Dividend = 128,000 stocks
No. of Shares outstanding after Stock Dividend = 3,200,000 + 128,000
No. of Shares outstanding after Stock Dividend = 3,328,000 Shares
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.