Shares in Tichibo are selling for $55 per share. There are one million shares outstanding. What will be the share price in each of the following situations? Ignore taxes. (Round your answers to the nearest cent.)
| a. | The stock splits five-for-four. |
| Price $ |
| b. | The company pays a 24% stock dividend. |
| Price $ |
| c. | The company repurchases 127,000 shares. |
| Price $ |
a. 5 for 4 stock split means that 5 shares will be issued for every 4 held.
Price per share = 55*4/5 = $44
B. 24% stock dividend means that 0.24 shares will be issued as dividend for every share held.
Price per share = 55/1.24 = $44.35
C. Since the shares have been repurchased at market price, no change in the price per share
Price per share = $55
Shares in Tichibo are selling for $55 per share. There are one million shares outstanding. What...