Jersey Mining earns $9.50 a share, sells for $90, and pays a $6 per share dividend. The stock is split two for one and a $3 per share cash dividend is declared. What will be the new price of the stock? If the firm’s total earnings do not change, what is the payout ratio before and after the stock split.?
Jersey Mining earns $9.50 a share, sells for $90, and pays a $6 per share dividend. The stock is split two for one and a $3 per share cash dividend is declared. What will be the new price of the stock? If the firm’s total earnings do not change, what is the payout ratio before and after the stock split.?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Jersey Mining earns $9.50 a share, sells for $90, and pays a $6 per share dividend. The stock is split two for one and a $3 per share cash dividend is declared.
- What will be the new price of the stock?
- If the firm’s total earnings do not change, what is the payout ratio before and after the stock split.?
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