
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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Chapter 17 Solutions
Connect 1 Semester Access Card for Fundamentals of Corporate Finance
- Lonnie is considering an investment in the Cat Food Industries. The $10,000 par value bonds have a quoted annual interest rate of 12 percent and the interest is paid semiannually. The yield to maturity on the bonds is 14 percent annual interest. There are seven years to maturity. Compute the price of the bonds based on semiannual analysis.arrow_forwardNeed solution this wuarrow_forwardneed assarrow_forward
- Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
