FCF Co. has 13,000 shares outstanding and a total market value of $1 million, $340,000 of which is debt and the other $660,000 is equity. It is planning a 10% stock dividend. a. What is the stock price before the dividend, and what will it be after the dividend? b. If an investor owns 3000 shares before the dividend, what will be the total value of her investment in FCF before and after the dividend?

FCF Co. has 13,000 shares outstanding and a total market value of $1 million, $340,000 of which is debt and the other $660,000 is equity. It is planning a 10% stock dividend. a. What is the stock price before the dividend, and what will it be after the dividend? b. If an investor owns 3000 shares before the dividend, what will be the total value of her investment in FCF before and after the dividend?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 5P

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