Usurp Corp., an Internet service provider, has prospered during the past seven years, and recently the company’s share price increased to $244.00. Usurp’s management wishes to decrease the share price to the range of $116.00 to $124.00, which will be attractive to more investors.

Required

1. Should the company issue a 100 percent stock dividend or split the stock? Why?

2. If you propose a stock split, state the split ratio that will accomplish the company’s objective. Show your computations.