Bermuda Triangle Corporation (BTC) currently has 390,000 shares of stock outstan
ID: 2762649 • Letter: B
Question
Bermuda Triangle Corporation (BTC) currently has 390,000 shares of stock outstanding that sell for $102 per share. Assuming 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).):
Bermuda Triangle Corporation (BTC) currently has 390,000 shares of stock outstanding that sell for $102 per share. Assuming no market imperfections or tax effects exist.
Explanation / Answer
New price = old price*split ratio
=102*3/5
=61.2
New shares o/s = old shares o/s/split ratio
=390000*5/3
=650000
New price = old price/(1+stock dividend)
=102/(1+0.1)
=92.73
New shares o/s = old shares o/s*(1+stock dividend)
=390000*(1+0.1)
=429000
New price = old price/(1+stock dividend)
=102/(1+0.37)
=74.45
New shares o/s = old shares o/s*(1+stock dividend)
=390000*(1+0.37)
=534300
New price = old price*split ratio
=102*(7/4)
=178.5
New shares o/s = old shares o/s/split ratio
=390000*(4/7)
=222857.14
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