Stock Splits and Stock Dividends [LO3] Red Rocks Corporation (RRC) currently has 425,000 shares of stock outstanding that sell for $80 per share. Assuming no market imperfections or tax effects exist, what will the share price be after: a. RRC has a fi ve-for-three stock split? b. RRC has a 15 percent stock dividend? c. RRC has a 42.5 percent stock dividend? d. RRC has a four-for-seven reverse stock split? Determine the new number of shares outstanding in parts (a) through (d). 6:00
Stock Splits and Stock Dividends [LO3] Red Rocks Corporation (RRC) currently has 425,000 shares of stock outstanding that sell for $80 per share. Assuming no market imperfections or tax effects exist, what will the share price be after: a. RRC has a fi ve-for-three stock split? b. RRC has a 15 percent stock dividend? c. RRC has a 42.5 percent stock dividend? d. RRC has a four-for-seven reverse stock split? Determine the new number of shares outstanding in parts (a) through (d). 6:00
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
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![Stock Splits and Stock Dividends [LO3] Red Rocks
Corporation (RRC) currently has 425,000 shares
of stock outstanding that sell for $80 per share.
Assuming no market imperfections or tax effects
exist, what will the share price be after: a. RRC has
a fi ve-for-three stock split? b. RRC has a 15 percent
stock dividend? c. RRC has a 42.5 percent stock
dividend? d. RRC has a four-for-seven reverse
stock split? Determine the new number of shares
outstanding in parts (a) through (d).
6:00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd0f3e0d8-4ec6-4e78-9569-c5c7ae9ad47e%2F89222df5-71a3-4305-a9c5-cc9d4fb6f232%2Fv7pjy7l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Stock Splits and Stock Dividends [LO3] Red Rocks
Corporation (RRC) currently has 425,000 shares
of stock outstanding that sell for $80 per share.
Assuming no market imperfections or tax effects
exist, what will the share price be after: a. RRC has
a fi ve-for-three stock split? b. RRC has a 15 percent
stock dividend? c. RRC has a 42.5 percent stock
dividend? d. RRC has a four-for-seven reverse
stock split? Determine the new number of shares
outstanding in parts (a) through (d).
6:00
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