Worst Buy Company has had a lot of complaints from customers of late, and its stock price is now only $4 per share. It is going to employ a one-for-six reverse stock split to increase the stock value. Assume Dean Smith owns 180 shares. a. How many shares will he own after the reverse stock split? (Do not round intermediate calculations and round your answer to the nearest whole number.) Number of shares

Worst Buy Company has had a lot of complaints from customers of late, and its stock price is now only $4 per share. It is going to employ a one-for-six reverse stock split to increase the stock value. Assume Dean Smith owns 180 shares. a. How many shares will he own after the reverse stock split? (Do not round intermediate calculations and round your answer to the nearest whole number.) Number of shares

Name: Worst Buy Company has had a lot of complaints from customers of late,
Uploaded: 2024-03-20T06:51:32.000Z
Channel: Bartleby
Description: Worst Buy Company has had a lot of complaints from customers of late, and its stock price is now only $4 per share. It is goingto employ a one-for-six reverse stock split to increase the stock value. Assume Dean Smith owns 180 shares.a. How many sha

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 14EB: Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the...

See similar textbooks

Similar questions

According to a company press release, on January 5, 2012, Hansen Natural Corporation changed its name to Monster Beverage Corporation. According to Yahoo Finance, on that day the value of the company stock (symbol: MNST) was $15.64 per share. On January 5, 2018, the stock closed at $63.49 per share. This represents an increase of nearly 306%. A. Discuss the factors that might influence the increase in share price. B. Consider yourself as a potential shareholder. What factors would you consider when deciding whether or not to purchase shares in Monster Beverage Corporation today?
Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the stocks market value per share is $30. At that time, there are 10,000 shares of $1 par value common stock outstanding (none held in treasury). What is the new par value of the shares and how many shares are outstanding after the split? What is the total amount of equity before and after the split?
Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the stocks market value per share is $30. At that time, there are 10,000 shares of $1 par value common stock outstanding (none held in treasury). What is the new par value of the shares and how many shares are outstanding after the split?
If a company declares a 4-for-3 stock split, the price before the split is $60, and the price after the split is $45, show that a current shareholder is no better off after the split. Current shareholders are no better off after the 4-for-3 split because if they owned three shares at $60 per share before the split, they would then own ____ shares shares worth $45 each immediately after the split.
Companies sometimes consider stock splits to bring down the price so that the stock attracts more purchases. Consider the following case: Tolbotics Inc. currently has 15,000 shares of common stock outstanding. Its management believes that its current stock price of $90 per share is too high. The company is planning to conduct stock splits in the ratio of 4 for 1 as described in the animation. If Tolbotics Inc. declares a 4-for-1 stock split, the price of the company’s stock after the split, assuming that the total value of the firm’s stock remains the same after the split, will be ________ Fuzzy Muffin Manufacturing Company is one of Tolbotics’s leading competitors. Fuzzy Muffin’s market intelligence research team shares Tolbotics’s plans of announcing a stock split, influencing the distribution policymakers. Consequently, executives at Fuzzy Muffin decide to offer stock dividends to its shareholders. Fuzzy Muffin currently has 1,900,000 shares of common stock…
Given that Local Care, Inc.'s stock is currently selling for $65 a share, calculate the amount of money that Elijah Pearson will make (or lose) on each of the following transactions. Assume that all transactions involve 100 shares of stock, and ignore brokerage commissions. Input all answers as positive values. He short-sells the stock and then repurchases the borrowed shares at $85.Total of $ . He buys the stock and then sells it some time later at $85.Total of $ . He short-sells the stock and then repurchases the borrowed shares at $50.Total of $ .
Marcos Company, which had 35,000 shares of common stock outstanding, declared a 4-for-1 stock split. a. What will be the number of shares outstanding after the split? shares b. If the common stock had a market price of $280 per share before the stock split, what would be an approximate market price per share after the split?$ per share
Suppose Formura’s stock is currently trading at $50 per share, but Lorenzo believes that the stock is overpriced. In response to this, he calls his broker to take a short position on 300 shares of Formura’s stock. Over the next three months, the price of Formura’s stock decreased, and Lorenzo placed an order to purchase 300 shares to offset his short position. If the price decreased to $45, then Lorenzo stands to earn $______ from his short position. -$3,000 $3,000 -$1,500 $1,500
Foster Enterprises' stock is trading for $40 per share and there are currently 19 million shares outstanding. It would like to raise $95 million. Assume its underwriter charges 8% of gross proceeds. a. How many shares must it sell? b. If it expects the stock price to drop by 1% upon announcement of the SEO, how many shares should it plan to sell? c. If all of the shares are primary shares and are sold to new investors, what percentage reduction in ownership will all of the existing shareholders experience?
Suppose that you own 1,800 shares of Nocash Corp. and the company is about to pay a 25% stock dividend. The stock currently sells at $115 per share. a. What will be the number of shares that you hold after the stock dividend is paid? (Do not round intermediate calculations.) b. What will be the total value of your equity position after the stock dividend is paid? (Do not round intermediate calculations.) c. What will be the number of shares that you hold if the firm splits five-for-four instead of paying the stock dividend?
Suppose that you own 2,800 shares of Nocash Corp. and the company is about to pay a 25% stock dividend. The stock currently sells at $125 per share. a. What will be the number of shares that you hold after the stock dividend is paid? (Do not round intermediate calculations.) b. What will be the total value of your equity position after the stock dividend is paid? (Do not round intermediate calculations.) c. What will be the number of shares that you hold if the firm splits five-for-four instead of paying the stock dividend? (Do not round intermediate calculations.)
Lauren has a margin account and deposits $49,994 into it. Assume the prevailing margin requirement is 40%, interest and commisions are ignored, and the Gentry Wine Corporation is selling at $35 per share. a) How many shares can Lauren purchase using the maximum allowable margin? b) What is Lauren's profit (loss) if the price of Gentry's stock 1) rises to $45 and Lauren sells the stock? 2) falls to $25 and Lauren sells the stock? c) If the maintenance margin is 30% to what price can Gentry Wine fall before Lauren will receive a margin call?