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Stock Split Fauver Enterprises declared a 4-for-1 stock split last year, and this year its dividend...

Stock Split

Fauver Enterprises declared a 4-for-1 stock split last year, and this year its dividend is $1.30 per share. This total dividend payout represents a 5% increase over last year's pre-split total dividend payout. What was last year's dividend per share? Round your answer to the nearest cent.

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Answer #1
4 in 1 Stock Split means 4 Shares will be given for 1 Share held.
Dividend per Share this year(after Stock Split) = $ 1.3
Dividend per Share this year(Pre Stock Split) = $ 1.3 * 4 Shares = $ 5.2
Let 'x' be the last year Dividend per Share.
Given, The total dividend payout represents a 5% increase over last year's pre-split total dividend payout.
Pre Split Dividend per Share this year = x + 5% = 1.05x
Pre Split Dividend per Share this year: 1.05x = $ 5.2
1.05x = $ 5.2
       x = $ 5.2 / 1.05
Therefore, Last year Dividend per Share(x) = $ 4.9524 = $ 4.95
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