Question

Entries for Cash Dividends

The declaration, record, and payment dates in connection with a cash dividend of $46,300 on a corporation's common stock are January 12, March 13, and April 12.

If no entry is required, select "No Entry Required" and leave the amount boxes blank.

Jan. 12	Cash Dividends
	Cash Dividends Payable
Mar. 13	No Entry Required
	No Entry Required
Apr. 12	Cash Dividends Payable
	Cash

1. Effect of Stock Split

Copper Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Copper Grill Restaurant Corporation, which had 57,000 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 $96 per share before the stock split, what would be an approximate market price per share after the split?
$ per share

Answer 1

In stock split number of outstanding shares increases by the number of split the company is doing of the shares , and on the other hand the Market value of the shares also reduces to the number of times the outstanding shares have increased.

Number of outstanding shares

Stock split 4 for 1 share.

Therefore Total outstanding shares

= 57,000*4

= 228,000 shares

B

Market price before stock split = $96

As the stock split is 4 for 1 therefore the Market price will decrease by 4 times

After split Market price

= 96/4

= $24 per share.

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