1. Still Boston DuckBoat Company. The company just paid a cash dividend of $0.50
ID: 2759327 • Letter: 1
Question
1. Still Boston DuckBoat Company. The company just paid a cash dividend of $0.50 per share. What will be the new share price after the dividend payment?
a. $5.50
b. $74.50
c. $75.50
d. $79.50
e. $80.50
2. US Parcel Inc has 9000 shares of stock outstanding and a current stock price of $25.00 per share. The company has no debt. The company is currently short on cash and announces that instead of a cash dividend they will pay the following stock dividend: one new share of stock for each 10 shares held (that is a 10% stock dividend). What will the new price per share if US Parcel be after the stock dividend goes into effect?
a. $22.73
b. $24.56
c. $25.32
d. $28.67
e. $29.43
3. Yahoo is currently trading at $50 per share. You have 10,000 shares of Yahoo. The company is going to announce a 1-2 stock split to the public. What is the value of your stock each share after the stock split?
a. $25
b. $50p
c. $75
d. $100
e. $125
PLEASE ANSWER ALL QUESTIONS AND SHOW ALL WORK.
Explanation / Answer
Solution 2:
Total equity = no. of shares x price
= 9000 x 25
= 225000
After stock dividend total equity will not change but no. of shares will change.
No. of shares = current stocks + stock dividend shares
= 9000 + 9000 x 10%
= 9900
Price per share = 225000/9900
= 22.73
your question 1 is incompplete
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