Winkie Banking has just announced a 100% stockdividend. The annual cash dividend

Question

Winkie Banking has just announced a 100% stockdividend.   The annual cash dividend per share was $2.40before stock dividend. Winkie intends to pay $1.40 per shareon each of the new shares. Compute the percentage increase in the cash divident rate thatwill accompnay the stock dividend. Winkie Banking has just announced a 100% stockdividend.   The annual cash dividend per share was $2.40before stock dividend. Winkie intends to pay $1.40 per shareon each of the new shares. Compute the percentage increase in the cash divident rate thatwill accompnay the stock dividend.

Explanation / Answer

Annual Cash Dividend pershare (before stock dividend)    =    $2.40 Dividend value per share on new shares(after stock dividend) = $1.40 [($1.40 - $2.40) / $2.40]  = -41.67% Percentage decrease in the cash divdendrate = -41.67% Hope it may help you Annual Cash Dividend pershare (before stock dividend)    =    $2.40 Dividend value per share on new shares(after stock dividend) = $1.40 [($1.40 - $2.40) / $2.40]  = -41.67% Percentage decrease in the cash divdendrate = -41.67%

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