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Calculate the value of a share of IBM after stock dividends

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Market prices following a stock split or stock dividend.

Assume that IBM is selling for $180 per share. IBM implements one of the following stock splits, and no other change in the value of the firm occurs. What is the value of one share for each of the following?

a. An 8% stock dividend
b. A 50% stock dividend

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This solution helps calculate the value of a share of IBM.

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Cash dividend does not influence the value of the stocks, unlike stock dividends.

Assume that IBM has 1,000 shares
a. with an increase in 8% of stock ...

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