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peanut butter and jelly has 37,000 shares I was standing at a market price of $89.92...

peanut butter and jelly has 37,000 shares I was standing at a market price of $89.92 what will you share price be if the company declares a stock dividend of 10%?

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Answer #1

Market value of firm post and pre dividend would remain same.

Market value of firm = Number of shares * Price per share

Market value of firm pre-event = Market value of firm post-event

Number of shares pre-dividend * Price per share pre-dividend = Number of shares post-dividend * Price per share post-dividend

Number of shares post-dividend = 37,000 * (1 + 10%) = 40,700

37,000 * $89.92 = 40,700 * Price per share post-dividend

Price per share post-dividend = $81.75

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