Simmons Mineral Operations, Inc., (SMO) currently has 515,000 shares of stock ou

Question

Simmons Mineral Operations, Inc., (SMO) currently has 515,000 shares of stock outstanding that sell for $40 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:

SMO has a five-for-three stock split? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

SMO has a 15 percent stock dividend? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

SMO has a 44.5 percent stock dividend? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

SMO has a two-for-seven reverse stock split? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

Determine the new number of shares outstanding in parts (a) through (d). (Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.)

Simmons Mineral Operations, Inc., (SMO) currently has 515,000 shares of stock outstanding that sell for $40 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:

Explanation / Answer

a) 5 for 3 stock split Prior number of shares outstanding 515000 Prior market price 40 Total market value 20600000 after stock split Number of share outstanding (515000/3*5) 858333 market price ( 40*3/5) 24 Total market value 20600000 b) 15% stock dividend Prior number of shares outstanding 515000 Prior market price 40 Total market value 20600000 after 15% stock dividend Number of share outstanding 515000 *115% 592250 market price ( 20600000/592250) 34.78 Total market value 20600001 c) 44.5% stock dividend Prior number of shares outstanding 515000 Prior market price 40 Total market value 20600000 after 44.5% stock dividend Number of share outstanding 515000 *144.5% 744175 market price ( 20600000/744175) 27.68 Total market value 20600000 d) 2 for 7 reverse stock split Prior number of shares outstanding 515000 Prior market price 40 Total market value 20600000 after stock split Number of share outstanding (515000/7*2) 147143 market price ( 40*7/2) 140 Total market value 20600000 e) a) New shares outstanding 858333 b) New shares outstanding 592250 c) New shares outstanding 744175 d) New shares outstanding 147143

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