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Stock Splits and Stock Dividends for Roll Corporation

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Stock splits and stock dividends.

Roll Corporation (RC) currently has 260,000 shares of stock outstanding that sell for $78 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:

a. RC has five-for-three stock split?
b. RC has a 15% stock dividend?
c. RC has a 42.5 percent stock dividend?
d. RC has a four-for-seven reverse stock split?

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Solution Summary

The solution computes share price under various stock spilt, stock dividend scenarios.

Solution Preview

Whenever there is stock split or stock dividend issued the share price changes proportionately with no. of increase or decrease in outstanding shares.

(a) Here company is issuing 5 shares for every 3 shares held. What we should know here is ...

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