Concept explainers
a)
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.
b)
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.
c)
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.
d)
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.
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