Red Rocks Corporation (RRC) currently has 485,000 shares of stock outstanding th

Question

Red Rocks Corporation (RRC) currently has 485,000 shares of stock outstanding that sell for $40 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:

RRC has a four-for-three stock split? (Round your answer to 2 decimal places. (e.g., 32.16))

RRC has a 15 percent stock dividend? (Round your answer to 2 decimal places. (e.g., 32.16))

RRC has a 54.5 percent stock dividend? (Round your answer to 2 decimal places. (e.g., 32.16))

RRC has a two-for-seven reverse stock split? (Round your answer to 2 decimal places. (e.g., 32.16))

Determine the new number of shares outstanding in parts (a) through (d).

RRC has a four-for-three stock split? (Round your answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

1. 485,000/3 *4= 646,666, the new price will be $29.70

2. 15% stock dividend is $4.4 per share

3. at 54.5% dividend, it is $15.6

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