Your Aunt Mary recently called to ask you about a letter she had just received from her stockbroker She said that the letter notified her that one of the stocks she owns will be paying a 10 percent stock dividend, so her 100 shares will now be 110 shares Because the stock was trading at $20 a share...

Un f o r tun a t e l y Aunt M a r y is not r i g ht The ...

Your Aunt Mary recently called to ask you about a letter she had just received from her

Question:

Your Aunt Mary recently called to ask you about a letter she had just received from her stockbroker. She said that the letter notified her that one of the she owns will be paying a 10 percent stock dividend, so her 100 shares will now be 110 shares. Because the stock was trading at $20 a share before the stock dividend, she said that she was thrilled that she will soon hold 110 shares worth $2,200 but she wanted to check with you to determine if she was right. Explain to your Aunt Mary what exactly has happened here.
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...