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Stocks: Equity Positions and Dividend Yields

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Please help answer the following problem. Provide step by step calculations.

1. You own 1000 shares of XYZ Corp. and the company is about to pay a 25% stock dividend. The stock currently sells for $100 per share. What will be the number of shares that you hold and the total value of your equity position after the dividend is paid?

2. DCH Industries pays a quarterly dividend of $2 per share. The dividend yield on its stock is reported at 4.8%. At what price is the stock selling?

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Solution Summary

This is a discussion on equity positions and the dividend paid for specific corporations. Step by step calculations are given for each.

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1. You own 1000 shares of XYZ Corp. and the company is about to pay a 25% stock dividend. The stock currently sells for $100 per share. What will be the number of shares that you hold and the total value of your equity position after the dividend is paid?

As a part of the financing decision the dividend policy of the firm is a residual decision and the dividends are a passive residual. So long firm is able ...

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