Bermuda Triangle Corporation (BTC) currently has 420,000 shares of stock outstan

Question

Bermuda Triangle Corporation (BTC) currently has 420,000 shares of stock outstanding that sell for $94 per share. Assume no market imperfections or tax effects exist.

Determine the share price and new number of shares outstanding if: (Do not round intermediate calculations. Round your price per share answers to 2 decimal places (e.g., 32.16) and shares outstanding to the nearest whole number (e.g., 32).):

Determine the share price and new number of shares outstanding if: (Do not round intermediate calculations. Round your price per share answers to 2 decimal places (e.g., 32.16) and shares outstanding to the nearest whole number (e.g., 32).):

Explanation / Answer

BERMUDA TRIANGLE CORPORATION (BTC) Current stock outstanding          420,000 Market price per share $94.00 (a) BTC has a five-for-three stock split Five for three stock split means every three current shares get converted to five shares and vice versa for the market price Stock outstanding post split = 420,000 x 5/3 Stock outstanding post split =        700,000 Market price per share = 94 x 3/5 Market price per share = $56.40 (b) BTC has a 15 percent stock dividend. Stock dividend increases the number of shares outstanding by 15% Market price per share is derived by dividing (1+15%) Stock outstanding post split = 420,000 x (1+15%) Stock outstanding post split = 483,000 Market price per share = 94

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.