EXERCISE $12\mathrm{.}2$ Stock Dividends and Stock Splits LO$12-4$

Assume that when you were in high school you saved $$1,000$ to invest for your college education. You purchased $200$ shares of Smiley Incorporated, a small but growing company. Over the three years that you have owned the stock, the corporation's board of directors has taken the following actions.

Declared a $2-$for$-1$ stock split.

Declared a $20$ percent stock dividend.

Declared a $3-$for$-1$ stock split.

The current price of the stock is $$12$ per share.

a$.$ Calculate the current number of shares and the market value of your investment.

b$.$ Explain the likely reason the board of directors of the company has not declared a cash dividend.

c$.$ State your opinion as to whether or not you would have been better off if the board of directors had declared a cash dividend instead of the stock dividend and stock splits.

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