Kosmier Company has outstanding 500,000 shares of $50 par value common stock that originallysold for $60 per share. During the three most recent years, the company carried out the followingactivities in the order presented: declared and distributed a 10 percent stock dividend, declared andpaid a cash dividend of $1 per share, declared and distributed a 2-for-1 stock split, and declaredand paid a $0.60 per share cash dividend.a. Determine the number of shares of stock outstanding after the four transactions describedabove.b. Determine the amount of cash that the company paid in the four transactions describedabove.c. If you were a stockholder who held 100 shares of stock that you purchased four years agowhen the market value of the shares was $65, how many shares would you own after the four transactions described above? If the market value of the stock was $40 after the four transac-tions, would you be better or worse off than before the four transactions?
Kosmier Company has outstanding 500,000 shares of $50 par value common stock that originally
sold for $60 per share. During the three most recent years, the company carried out the following
activities in the order presented: declared and distributed a 10 percent stock dividend, declared and
paid a cash dividend of $1 per share, declared and distributed a 2-for-1 stock split, and declared
and paid a $0.60 per share cash dividend.
a. Determine the number of shares of stock outstanding after the four transactions described
above.
b. Determine the amount of cash that the company paid in the four transactions described
above.
c. If you were a stockholder who held 100 shares of stock that you purchased four years ago
when the market value of the shares was $65, how many shares would you own after the four
transactions described above? If the market value of the stock was $40 after the four transac-
tions, would you be better or worse off than before the four transactions?
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