Question

Bermuda Triangle Corporation (BTC) currently has 590,000 shares of stock outstanding that sell for $92 per share. Assume no market imperfections or tax effects exist. Determine the share price and new number of shares outstanding if: (Do not round intermediate calculations. Round your price per share answers to 2 decimal places, e.g., 32.16, and shares outstanding answers to the nearest whole number, e.g., 32.) a. BTC has a five-for-three stock split. b. BTC has a 14 percent stock dividend. c. BTC has a 40.0 percent stock dividend. d. BTC has a four-for-seven reverse stock split.

Answer 1

Answer:

a. The share price will be = $92 * 3 / 5 = $55.2

The number of shares will be = 590,000 shares * 5/3 = 983,333 shares

b. The share price will be $92 / 1.14 = $80.70175 = $80.70

The number of shares will be = 590,000 * 1.14 = 672,600 shares

c. The share price will be = $92 / 1 .40 = $65.714286 = $65.71

The number of shares will be = 590,000 * 1.4 = 826,000 shares

d. The share price will be = $92 * 7 / 4 = $161

The number of shares will be = 590,000 * 4 / 7 = 337,143 shares