SoFi Technologies Inc. (SOFI) currently has 13 million shares of common stock outstanding and is selling for $215 a share. The company is planning to conduct a 5-for-1 stock split. If SOFI declares a 5-for-1 stock split, what will the price of the company’s stock be after the split—assuming that the total value of the firm’s stock remains the same before and after the split? How many shares of SOFI will be outstanding? Now imagine of instead of performing a stock split, SOFI decides to pay a stock dividend. If SOFI declares a 5.5% stock dividend, how many shares will the firm issue to existing shareholders? Now, in lieu of conducting a stock split or declaring a stock dividend, SOFI decides to buyback 1,500,000 shares of stock at market price. How much cash will it take to perform this buyback? Using the same information as Question #4, if SOFI performs the buyback, what should the new market share price be assuming the total value of the company hasn't changed? Round answer to nearest cent   Question #1   Question #2   Question #3   Question #4   Question #5

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation
Section: Chapter Questions
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SoFi Technologies Inc. (SOFI) currently has 13 million shares of common stock outstanding and is selling for $215 a share. The company is planning to conduct a 5-for-1 stock split.

  1. If SOFI declares a 5-for-1 stock split, what will the price of the company’s stock be after the split—assuming that the total value of the firm’s stock remains the same before and after the split?
  2. How many shares of SOFI will be outstanding?
  3. Now imagine of instead of performing a stock split, SOFI decides to pay a stock dividend. If SOFI declares a 5.5% stock dividend, how many shares will the firm issue to existing shareholders?
  4. Now, in lieu of conducting a stock split or declaring a stock dividend, SOFI decides to buyback 1,500,000 shares of stock at market price. How much cash will it take to perform this buyback?
  5. Using the same information as Question #4, if SOFI performs the buyback, what should the new market share price be assuming the total value of the company hasn't changed? Round answer to nearest cent

 

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