The share price after 5-3 stock split. Introduction: Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

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Answer 1

Question

Chapter 17, Problem 4QP

a)

Summary Introduction

To determine: The share price after 5-3 stock split.

Introduction:

Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

Summary Introduction

To determine: New outstanding shares.

b)

Summary Introduction

To determine: The share price at 15% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

c)

Summary Introduction

To determine: The share price at 42.5% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

d)

Summary Introduction

To determine: The share price after 4-7 reverse stock split.

Introduction:

Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.

Summary Introduction

To determine: New outstanding shares.

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Scenario one: Under what circumstances would it be appropriate for a firm to use different cost of capital for its different operating divisions? If the overall firm WACC was used as the hurdle rate for all divisions, would the riskier division or the more conservative divisions tend to get most of the investment projects? Why? If you were to try to estimate the appropriate cost of capital for different divisions, what problems might you encounter? What are two techniques you could use to develop a rough estimate for each division’s cost of capital?

Scenario three: If a portfolio has a positive investment in every asset, can the expected return on a portfolio be greater than that of every asset in the portfolio? Can it be less than that of every asset in the portfolio? If you answer yes to one of both of these questions, explain and give an example for your answer(s). Please Provide a Reference

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Answer 2

Question

Chapter 17, Problem 4QP

a)

Summary Introduction

To determine: The share price after 5-3 stock split.

Introduction:

Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

Summary Introduction

To determine: New outstanding shares.

b)

Summary Introduction

To determine: The share price at 15% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

c)

Summary Introduction

To determine: The share price at 42.5% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

d)

Summary Introduction

To determine: The share price after 4-7 reverse stock split.

Introduction:

Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.

Summary Introduction

To determine: New outstanding shares.

Expert Solution & Answer

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Answer 3

Question

Chapter 17, Problem 4QP

a)

Summary Introduction

To determine: The share price after 5-3 stock split.

Introduction:

Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

Summary Introduction

To determine: New outstanding shares.

b)

Summary Introduction

To determine: The share price at 15% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

c)

Summary Introduction

To determine: The share price at 42.5% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

d)

Summary Introduction

To determine: The share price after 4-7 reverse stock split.

Introduction:

Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.

Summary Introduction

To determine: New outstanding shares.

Expert Solution & Answer

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Answer 4

Question

Chapter 17, Problem 4QP

a)

Summary Introduction

To determine: The share price after 5-3 stock split.

Introduction:

Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

Summary Introduction

To determine: New outstanding shares.

b)

Summary Introduction

To determine: The share price at 15% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

c)

Summary Introduction

To determine: The share price at 42.5% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

d)

Summary Introduction

To determine: The share price after 4-7 reverse stock split.

Introduction:

Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.

Summary Introduction

To determine: New outstanding shares.

Expert Solution & Answer

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Answer 5

Chapter 17, Problem 4QP

a)

Summary Introduction

To determine: The share price after 5-3 stock split.

Introduction:

Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

Summary Introduction

To determine: New outstanding shares.

b)

Summary Introduction

To determine: The share price at 15% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

c)

Summary Introduction

To determine: The share price at 42.5% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Summary Introduction

To determine: New outstanding shares.

d)

Summary Introduction

To determine: The share price after 4-7 reverse stock split.

Introduction:

Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.

Summary Introduction

To determine: New outstanding shares.

Answer 6

Chapter 17, Problem 4QP

a)

Summary Introduction

To determine: The share price after 5-3 stock split.

Introduction:

Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

Answer 7

Chapter 17, Problem 4QP

a)

Summary Introduction

To determine: The share price after 5-3 stock split.

Introduction:

Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

Answer 8

Summary Introduction

To determine: New outstanding shares.

Answer 9

Summary Introduction

To determine: New outstanding shares.

Answer 10

b)

Summary Introduction

To determine: The share price at 15% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Answer 11

b)

Summary Introduction

To determine: The share price at 15% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Answer 12

Summary Introduction

To determine: New outstanding shares.

Answer 13

Summary Introduction

To determine: New outstanding shares.

Answer 14

c)

Summary Introduction

To determine: The share price at 42.5% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Answer 15

c)

Summary Introduction

To determine: The share price at 42.5% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

Answer 16

Summary Introduction

To determine: New outstanding shares.

Answer 17

Summary Introduction

To determine: New outstanding shares.

Answer 18

d)

Summary Introduction

To determine: The share price after 4-7 reverse stock split.

Introduction:

Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.

Answer 19

d)

Summary Introduction

To determine: The share price after 4-7 reverse stock split.

Introduction:

Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.

Answer 20

Summary Introduction

To determine: New outstanding shares.

Answer 21

Summary Introduction

To determine: New outstanding shares.

Answer 22

Expert Solution & Answer

Answer 23

Expert Solution & Answer

Answer 24

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Answer 25

Ch. 17.1 - Prob. 17.1ACQ Ch. 17.1 - What are the mechanics of the cash dividend...Ch. 17.1 - How should the price of a stock change when it...Ch. 17.2 - How can an investor create a homemade dividend?Ch. 17.2 - Prob. 17.2BCQ Ch. 17.3 - Prob. 17.3ACQ Ch. 17.3 - Why do flotation costs favor a low payout?Ch. 17.4 - Why might some individual investors favor a high...Ch. 17.4 - Prob. 17.4BCQ Ch. 17.5 - How does the market react to unexpected dividend...

The share price after 5-3 stock split. Introduction: Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

Solution Summary: The author explains that S incorporation has 490,000 shares of stock outstanding, sells at 73 per share with stock dividend of 15%.

Concept explainers

Videos

To determine: The share price after 5-3 stock split.

Introduction:

Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

To determine: New outstanding shares.

To determine: The share price at 15% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

To determine: New outstanding shares.

To determine: The share price at 42.5% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

To determine: New outstanding shares.

To determine: The share price after 4-7 reverse stock split.

Introduction:

Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.

To determine: New outstanding shares.

Want to see the full answer?

Chapter 17 Solutions

The share price after 5-3 stock split. Introduction: Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

Solution Summary: The author explains that S incorporation has 490,000 shares of stock outstanding, sells at 73 per share with stock dividend of 15%.

Concept explainers

Videos

To determine: The share price after 5-3 stock split. Introduction: Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

To determine: New outstanding shares.

To determine: The share price at 15% stock dividend. Introduction: Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

To determine: New outstanding shares.

To determine: The share price at 42.5% stock dividend. Introduction: Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

To determine: New outstanding shares.

To determine: The share price after 4-7 reverse stock split. Introduction: Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.

To determine: New outstanding shares.

Want to see the full answer?

Chapter 17 Solutions

To determine: The share price after 5-3 stock split.

Introduction:

Stock split: A company divides its share into multiple shares and issues them to the shareholders as an additional share; as per the decisions by the management is termed as stock split.

To determine: The share price at 15% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

To determine: The share price at 42.5% stock dividend.

Introduction:

Stock dividend: Distribution of dividend in the form of additional shares is termed as stock dividend. It is also termed as ‘Scrip dividend’.

To determine: The share price after 4-7 reverse stock split.

Introduction:

Reverse stock split: The Company reduces its share, which are outstanding. It is the opposite of forward stock splits. This works normally as a regular dividend but reverse action will take place.