Assume that you own 60 shares of common stock of a company, that you have been receiving cash dividends of $5 per share peryear, and that the company has a 6-for-5 stock splitRequired:a. How many shares of common stock will you own after the stock split?b. What new cash dividend per share amount will result in the same total dividend income as you received before the stock split?Note: Do not round intermediate calculations. Round your answer to 2 decimal places.c. What stock dividend percentage could have accomplished the same end result as the 6-for-5 stock split?a. Shares of common stockb.New cash dividendc. Stock dividendper share.%

When a business issues more shares to increase the stock's liquidity, the result is a stock split.…

Answered: Assume that you own 60 shares of common…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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An investor sells a stock short for $97 a share. The company pays a $4.70 annual cash dividend. After a year has passed, the seller covers the short position at $85. If the margin requirement is 57 percent, what is the percentage return earned on the investment?Redo the calculations, assuming the price of the stock is $103 when the investor closes the position.Based on your calculations to both scenarios, what generalization can be inferred?
Answer the multiple-choice question below: 1. Brown's Founders has preferred stock outstanding which pays a dividend of $5 at the end of each year. The preferred stock sells for $60 a share. What is the preferred stock's required rate of return? Select one: a.Kps=12.30% b.kps= 4.65% c.Kps=15.50% d.Kps=8.33%
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