(Stock splits and stock dividends) Chaney's Fatburner Gyms, Inc. operates a chain of exercise facilities throughout the Midwest. The firm appeals to middle-aged men who suffer from obesity problems and want to improve their health by entering an exercise program. The firm currently has 8 comma 000 comma 000 shares of stock outstanding that have a current market price of $11.08. If all else remains constant, what will be the price of Chaney's shares after each of the following?
a. A stock dividend of 20.8 percent.
b. A four-for-one stock split.
c. A stock dividend of 32.6 percent.
d. What would be the total number of shares outstanding after a through c?
a. The price of Chaney's shares after a stock dividend of 20.8 % will be $
(Round to the nearest cent.)
b. The price of Chaney's shares after a four-for-one stock split will be $
(Round to the nearest cent.)
c. The price of Chaney's shares after a stock dividend of 32.6 % will be $
nothing. (Round to the nearest cent.)
d. The total number of shares outstanding after the stock dividend of 20.8 % is
shares. (Round to the nearest integer.)
The total number of shares outstanding after the four-for-one stock split is
shares. (Round to the nearest integer.)
The total number of shares outstanding after the stock dividend of 32.6 % is
shares. (Round to the nearest integer.)
A: Current equity = Shares* Share price
=8000,000* 11.08
=88640000
Number of shares after dividend = 8000000*120.8% = 9664000
Share price = Equity/ Number of shares
= 88640000/9664000
=$9.17
B: Number of shares after split = 8000000*4 = 32000000
Share price = Equity/ Number of shares
= 88640000/32000000
= $2.77
C: Current equity = Shares* Share price
=8000,000* 11.08
=88640000
Number of shares after dividend = 8000000*132.6% = 10608000
Share price = Equity/ Number of shares
= 88640000/10608000
= $8.36
D: Number of shares after stock dividend of 32.6% =8000000*132.6% = 10608000
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