The market value balance sheet for Globe Manufacturing is shown here. There are 15,000 shares of stock outstanding. The company has declared a 20 percent stock dividend. The stock goes ex dividend tomorrow. What will the new stock price be?
Market value balance sheet Cash $80,000 Debt $100,000 Fixed Assets 570,000 Equity 550,000 Total $650,000 Total $650,000
Group of answer choices $25.46 $30.56 $33.05 $38.24 None of the above is correct.
|Market value of equity||$550,000|
|Number of shares outstanding||15000|
|Price before dividend= Market value of equity/Number of shares outstanding|
|Price after dividend= Price before dividend/(1+rate of dividend)|
|Answer: Option B|
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