The Chris Clapper Copper Company declared a 25 percent stock dividend on March 10 to shareholders of
Question:
a. If you sold your stock on March 20, what would be the price per share, all other things the same (no signaling effect)?
b. After the stock dividend is paid, how many shares of stock will you own?
c. At what price would you expect the stock to sell on April 2, all other things the same (no signaling effect)?
d. What will be the total value of your holdings before and after the stock dividend, all other things the same?
e. If there were an informational or signaling effect, what would be the effect on share price?
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...
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Related Book For
Fundamentals Of Financial Management
ISBN: 9780273713630
13th Revised Edition
Authors: James Van Horne, John Wachowicz
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