Question: HQ Company is considering a 1-for-3 reverse stock split. HQ's stock is currently selling for $3 per share. a. What will the price of the

HQ Company is considering a 1-for-3 reverse stock split. HQ's stock is currently selling for $3 per share.

a. What will the price of the stock be after the stock split?

b. HQ plans to pay a dividend equal to $0.30 per share after the split. The company would like to pay an equivalent dividend per share even if the split does not take place. What would the per-share dividend have to be if the HQ doesn't split the stock?

Step by Step Solution

★★★★★

3.58 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Stock split occurs when a company divides its existing share... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

352-B-C-F-C-V (1196).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

The Rank and File Company is considering a stock issue to raise $50 million. An underwriter offers to guarantee the success of the issue by buying any unwanted stock at the $25 issue price. The...

If a sale does not take place within one year, can an asset (or disposal group) still be classified as held for sale in accordance with HKFRS 5? 1. Yes. If the delay has been caused by events or...

The Super Muench Cookie Company is considering a diversification effort that would move it into small retail outlets at major malls around the country. Currently, Super Muench has a capital structure...

HQ Company is considering a 1-for-3 reverse stock split. HQs stock is currently selling for $3 per share. (a) What will the price of the stock be after the stock split? (b) HQ plans to pay a dividend...

HQ Company is considering a 1-for-3 reverse stock split. HQs stock is currently selling for $3 per share. a. What will the price of the stock be after the stock split? b. HQ plans to pay a dividend...

HQ Company is considering a 1-for-3 revers stock split. HQ's stock is currently selling for $3 per share. a. What will the price of the stock be after the stock split? b. HQ planes to pay dividend...

1. Do you think it would ever be rational for a firm to borrow money to pay dividends? Explain. 2. Last year, ZZZ Company retained $200,000 of the $500,000 net income it generated. This year, ZZZ...

Use the following information to answer questions 44-47. Starving Students, Inc. issued 15,000 shares of $2 par value stock in exchange for a used bus. The stock is currently selling for $3 per...

1. A call option on VacationToGo stock with exercise price of $100 expires today. The current price of the stock is $95. Which one of the following best describes this put option? A. Funded B....

4. Which of the following statements is correct? A. The value of a call increases as the price of the underlying stock decreases. B. The value of a call increases as the exercise price increases. C....

1) Discuss the importance of scholarly and professional literature review when conducting a new research project; define the meaning of scholarly literature; explain why a literature review is not a...

The following information was taken directly from the annual report of a firm that wishes to remain anonymous. (The dates have been changed.) FINANCIAL SUMMARY Effects of LIFO Accounting For a number...

How could a cultural/events organisation set up an experiment to test the effectiveness of two forms of advertising? What elements of the classic experimental design would need to be sacrificed? What...

The new management at a bakery claims that workers are now more productive than they were under old management, which is why wages have generally increased. Let Wb i be Worker is wage under the old...

Given a risk-free rate (rËf) of 6 percent and a market risk premium (rËm rËf) of 8.5 percent, calculate the required rate of return on each of the following stocks, based on the betas...

The stock of Pizza Hot, Inc., a Mexican pizza chain, has an estimated beta of 1.5. Calculate the required rate of return on Pizza Hots stock if the SML is estimated as follows: kj = 0.06 + 0.094j...

a. Suppose a U.S. Treasury bill, maturing in one year, can be purchased today for $92,500. Assuming that the security is held until maturity, the investor will receive $100,000 (face amount)....

1. The expected rate of return on the market portfolio is 11.50% and the riskfree rate of return is 2.00%. The standard deviation of the market portfolio is 19.75%. What is the representative...

I don't understand how to solve for this with this much information The distribution of actual weights of 8-ounce chocolate bars produced by a certain machine is Normal with mean 8.1 ounces and...

Please write in Python 3 Write a program that estimates the square root of a number using while loops. It should use the while loop to find the largest integer whose square is smaller than the number...