Carmen owns 300,000 shares of Wiseguy Entertainment. Wiseguy has just declared a $0.20 per share dividend on

Question:

Carmen owns 300,000 shares of Wiseguy Entertainment. Wiseguy has just declared a $0.20 per share on a stock selling at $25.20. What must Carmen do if she wants no cash dividends at this time, $40,000 of dividends, or $80,000 worth of dividends? Show her wealth in paper and cash under each scenario. Assume a world of no taxes.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...