Over the last six months, the price of Ixworth Inc.'s (Ixworth) shares has fallen from a high of $32 per share to its current price of $18. Ixworth doesn't plan to issue common shares in the foreseeable future, yet management has expressed concern about the falling share price. Explain why Ixworth's management might be concerned about its share price.
Answer to relevant QuestionsDistinguish between stock splits and stock dividends. How is each accounted for? What is the economic significance of each? What is meant by the term "economic consequences"? Why does accounting have economic consequences? Explain the dividend yield of a share and a company's dividend payout ratio. What does it mean if the dividend yield and dividend payout are zero? Is this a bad situation if both are zero? Why do most companies not pay out 100 percent of their earnings each year in dividends? Determine the missing amounts in 2015 through 2018 for the shaded areas in the tablebelow:
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