What happens if the corporation issues a 2-for-1 stock split?
If the corporation issues a 2-for-1 stock split, the market value of the stock is expected to: A. fall to approximately $60. B. fall to approximately $5. C. remain the same.
Does a forward split increase the number of shares outstanding?
- A forward split increase the number of shares and reduces the price without affecting the total market value of shares outstanding. - An investor will receive more shares, but the value of each share is reduced. - The total market value of the ownership interest is the same before and after the split. TRUE OR FALSE?
How many shares would an investor receive from a 5-4 split?
If ABC Corp. declares a 5-4 stock split, an investor who owns 300 shares would receive how many additional shares? A) 75. B) 100. C) 30. D) 60. A) 75. A 5-4 split represents a 25% increase in shares. For each 4 shares owned, the investor will receive 1 new share. 1/4 = 25% increase. 300 shares × 25% = 75 shares.
What is the effect of a stock split on the price?
I. The share price is reduced by half. II. The total market value of the outstanding stock decreases. III. The total market value of the outstanding stock may increase or decrease as a result of the split.
What does "e" mean in the market capitalization?
E) It wants the total market capitalization to be lower than the current level.
What happens if a company splits 5 for 1?
B) If a company has a 5-for-1 split, the new number of shares will be equal to the old number of shares divided by 5.
What is equity financing?
Equity financing is money received from the sale of
Which company typically distributes a higher percentage of earnings than rapidly growing firms?
E) Utility companies typically distribute a higher percentage of earnings than rapidly growing firms.
Who approves dividend payments?
A) Dividend payments must be approved by the stockholders.
Do individual companies charge for access to their own financial reports?
B) Individual company websites usually charge for access to their own financial reports.
Is there a substitute for researching a potential investment?
D) There is no substitute for researching a potential investment.
Why does stockholders' equity not change?
A. stockholders' equity will not change, because the amount of authorized stock has not changed.
How much did a corporation buy on February 13?
A corporation purchases 1,000 shares of its own common stock for $4,000 on February 13. On April 13, half of the treasury stock was sold for $3,000. On April 26, the other half of the treasury stock was sold for $1,800.
What is issued shares?
A. issued shares that are held by the treasurer of the corporation.
Does paid in capital have a debit balance?
B. Paid-In Capital from Sale of Treasury Stock may have a debit balance.
How to calculate x y split?
What are the steps to calculating a stock split? 1. Multiply the # of shares by the $ of each share to determine the total value of the stocks. 2. For an x:y split, multiply x by the # of shares and divide by y for the new # of shares.
How many shares are issued in a 3 for 2 split?
The investor will receive an additional 100 shares from a 3 for 2 stock split. To calculate the additional shares as a result of a split, multiply the existing number of shares by the split rates (200 shares × 3/2 = 300 shares). Because the investor owned 200 shares, she will be issued 100 additional shares, bringing ownership to 300 shares.
What happens when you reverse a split?
When a reverse split takes place, the number of outstanding shares is reduced. Since the split has no effect on earnings of the company, dividing those earnings by fewer shares will cause an increase to the earnings per share. The board of directors of DMF, Inc., announces a 5:4 stock split.
What is a 2 for 1 stock split?
In a 2-for-1 stock split, the number of outstanding shares is doubled and the price is reduced by half. The total market value (market cap) of the issuer's stock remains the same.
What does new # of shares times z mean?
New # of shares times z (new $ of each share) will equal the total value of the stocks
How much is a 5-4 split?
A 5-4 split represents a 25% increase in shares. For each 4 shares owned, the investor will receive 1 new share. 1/4 = 25% increase. 300 shares × 25% = 75 shares.
What is x-y split?
The x:y split is a forward split.