a.
To calculate: The cash dividend for each share during the four given stages.
Introduction:
Cash dividend per share: Dividend paid to shareholders for each share owned by the company from its earnings in the form of cash, by electronic transfers or by check is termed as cash dividend per share.
b.
To calculate: The after-tax income of an investor in Stage IV from cash dividends, assuming the number of shares owned to be 325 and the tax bracket to be 15%.
Introduction:
Cash Dividend: Dividend paid to the shareholders from the earnings of a company in cash, by electronic transfers or by check is termed as cash dividend.
c.
To explain: The two stages in which the firm would most likely use stock dividend or stock split.
Introduction:
Stock Dividend:
When a company pays dividend to its shareholders in the form of additional shares, it is termed as stock dividend. This form is generally paid out when the company has less cash reserves.
Stock split:
A corporate procedure through which the management of a company divides its current shares to increase the shares outstanding is termed as stock split. It helps in boosting the liquidity of shares.
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Loose Leaf for Foundations of Financial Management Format: Loose-leaf
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