Suppose that you own 3,400 shares of Nocash Corp. and the company is about to pa

ID: 2772818 • Letter: S

Question

Suppose that you own 3,400 shares of Nocash Corp. and the company is about to pay a 25% stock dividend. The stock currently sells at $125 per share.

A)What will be the number of shares that you hold after the stock dividend is paid? (Do not round intermediate calculations.)

B)What will be the total value of your equity position after the stock dividend is paid? (Do not round intermediate calculations.)

C)What will be the number of shares that you hold if the firm splits five for four instead of paying the stock dividend?

Suppose that you own 3,400 shares of Nocash Corp. and the company is about to pay a 25% stock dividend. The stock currently sells at $125 per share.

A)What will be the number of shares that you hold after the stock dividend is paid? (Do not round intermediate calculations.)

B)What will be the total value of your equity position after the stock dividend is paid? (Do not round intermediate calculations.)

C)What will be the number of shares that you hold if the firm splits five for four instead of paying the stock dividend?

A..Number of shares that you hold after the stock dividend is paid = 3400 SHARES X 1.25

= 4250 SHARES

B.. total value of your equity position after the stock dividend is paid

= 4250 SHARES X 125

= 531250

C.. Number of shares that you hold if the firm splits five for four instead of paying the stock dividend

= 3400 SHARES X 5 / 4

=4250 SHARES

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