2. MCC currently has 535,000 shares of stock outstanding that sell for $90 per s
ID: 2789682 • Letter: 2
Question
2. MCC currently has 535,000 shares of stock outstanding that sell for $90 per share. Assume no market imperfections or tax effects exist a. What will the share price be after MCC has a 12% stock dividend? what will be b. What will the share price be after MCC has a 5:2 (five-for-two) stock split? What c. What will the share price be after MCC has a 4:2 (four-for-two) stock split? What d. What will the share price be after MCC has a (36) three-for-six reverse stock split? e, what will the share price be after MCC has a 24.5% stock dividend? What will be the new number of shares outstanding after the stock dividend? will be the new number of shares outstanding after the stock dividend? will be the new number of shares outstanding after the stock dividend? What will be the new number of shares outstanding after the stock dividend? the new number of shares outstanding after the stock dividend? New Number Shares Outstanding New Share a, 12% Stock Dividend b. 5:2 Stock Split c. 4:2 Stock Split d. 3:6 Reverse Stock Split e. 24.5% Stock DividendExplanation / Answer
MCC currently has 535,000 shares of stock outstanding and share price is $90 per share
Total market value of shares before stock dividend = 535,000 shares * $90 = $48,150,000
a. What will the share price be after MCC has a 12% stock dividend? What will be the new number of shares outstanding after the stock dividend?
After MCC has a 12% stock dividend
New Number Shares Outstanding = Current Number of stock outstanding + 12% of Current Number of stock outstanding
= 535,000 shares + 12% *535,000 shares
= 599,200 shares
New Share Price = Total market value of shares before stock dividend / New Number Shares Outstanding
= $48,150,000 / 599,200 shares = $80.36 per share
b. What will the share price be after MCC has a 5:2 (five-for-two) stock split? What will be the new number of shares outstanding after the stock dividend?
New Number Shares Outstanding = Current Number of stock outstanding *(5/2)
= 535,000 *(5/2)
= 1,337,500 shares
New Share Price = Total market value of shares before stock dividend / New Number Shares Outstanding
= $48,150,000 / 1,337,500 shares = $36 per share
c. What will the share price be after MCC has a 4:2 (four-for-two) stock split? What will be the new number of shares outstanding after the stock dividend?
New Number Shares Outstanding = Current Number of stock outstanding *(4/2)
= 535,000 *(4/2)
= 1,070,000 shares
New Share Price = Total market value of shares before stock dividend / New Number Shares Outstanding
= $48,150,000 / 1,070,000 shares = $45 per share
d. What will the share price be after MCC has a (3:6) three-for-six reverse stock split? What will be the new number of shares outstanding after the stock dividend?
New Number Shares Outstanding = Current Number of stock outstanding *(3/6)
= 535,000 *(3/6)
= 267,500 shares
New Share Price = Total market value of shares before stock dividend / New Number Shares Outstanding
= $48,150,000 / 267,500 shares = $180 per share
e, what will the share price be after MCC has a 24.5% stock dividend? What will be the new number of shares outstanding after the stock dividend?
New Number Shares Outstanding = Current Number of stock outstanding + 24.5% of Current Number of stock outstanding
= 535,000 shares + 24.5% *535,000 shares
= 666,075 shares
New Share Price = Total market value of shares before stock dividend / New Number Shares Outstanding
= $48,150,000 / 666,075 shares = $72.29 per share
New Number Shares Outstanding
New Share Price
a. 12% Stock Dividend
599,200
$80.36
b. 5:2 Stock Split
1,337,500
$36.00
c. 4:2 Stock Split
1,070,000
$45.00
d. 3:6 Reverse Stock Split
267,500
$180.00
e. 24.5% Stock Dividend
666,075
$72.29
New Number Shares Outstanding
New Share Price
a. 12% Stock Dividend
599,200
$80.36
b. 5:2 Stock Split
1,337,500
$36.00
c. 4:2 Stock Split
1,070,000
$45.00
d. 3:6 Reverse Stock Split
267,500
$180.00
e. 24.5% Stock Dividend
666,075
$72.29
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