Connect 1 Semester Access Card for Fundamentals of Corporate Finance
Connect 1 Semester Access Card for Fundamentals of Corporate Finance
11th Edition
ISBN: 9781259289392
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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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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Chapter 17 Solutions

Connect 1 Semester Access Card for Fundamentals of Corporate Finance

Dividend disocunt model (DDM); Author: Edspira;https://www.youtube.com/watch?v=TlH3_iOHX3s;License: Standard YouTube License, CC-BY