The market value balance sheet for Sci-Fi Crimes Manufacturing is shown here. Sc
ID: 2740107 • Letter: T
Question
The market value balance sheet for Sci-Fi Crimes Manufacturing is shown here. Sci-Fi Crimes has declared a 20 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend).
There are 19,000 shares of stock outstanding. What is the current share price? (Round your answer to 2 decimal places. (e.g., 32.16))
What will the ex-dividend price be? (Round your answer to 2 decimal places. (e.g., 32.16))
The market value balance sheet for Sci-Fi Crimes Manufacturing is shown here. Sci-Fi Crimes has declared a 20 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend).
Explanation / Answer
1) The current stock price is 621000/19000 = 32.68$
2) The ex-dividend price will be 32.68 * 5/6 = 27.24$ (This is because previous 5 shares have now become 6 shares)
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