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Stock dividend/Stock split/reverse split

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Suppose the stock of Host Hotels & Resorts in currently trading for $20 per share.
a. If Host issued a 20% stock dividend, what will its new share price be?
b. If Host does a 3:2 stock split, what will its new share price be?
c. If Host does a 1:3 reverse split, what will its new share price be?

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Solution Preview

a. In a 20% stock dividend 20% more shares will be issued. The price will fall so that the total value of the shares remains the ...

Solution Summary

The solution explains the impact on share price of a stock dividend, stock split and a reverse split.