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    Stock Splits , Stock Dividends , Reverse stock split

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    Bermuda Triangle Corp. (BTC) currently has 300,000 shares of stock outstanding that sell for $80 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:

    a. BTC has a 5-for-3 stock split?
    b. BTC has a 15% stock dividend?
    c. BTC has a 42.5% stock dividend?
    d. BTC has a 4-for-7 reverse stock split?
    e. Determine the new number of shares outstanding in parts (a) through (d).

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    Solution Preview

    a. BTC has a 5-for-3 stock split?

    Number of shares =300,000

    For every 3 shares now there are 5 shares

    Hence the number of shares= 300,000 x 5/3= 500,000

    Since the total value of stocks will not change

    300,000 X 80= 500,000 X P

    P= $48

    Shares outstanding= 500,000

    b. BTC has a 15% stock dividend?

    Number of new ...

    Solution Summary

    The solution calculates the share price after Stock Splits , Stock Dividends and Reverse stock split