FCF Co. has 13,000 shares outstanding and a total market value of $1 million, $340,000 of which is debt and the other $660,000 is equity. It is planning a 10% stock dividend. a. What is the stock price before the dividend, and what will it be after the dividend? b. If an investor owns 3000 shares before the dividend, what will be the total value of her investment in FCF before and after the dividend?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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FCF Co. has 13,000 shares outstanding and a total market value of $1 million, $340,000 of which is debt and the other $660,000 is equity. It is planning a 10% stock dividend.
a. What is the stock price before the dividend, and what will it be after the dividend?
b. If an investor owns 3000 shares before the dividend, what will be the total value of her investment in FCF before and after the dividend?
Transcribed Image Text:FCF Co. has 13,000 shares outstanding and a total market value of $1 million, $340,000 of which is debt and the other $660,000 is equity. It is planning a 10% stock dividend. a. What is the stock price before the dividend, and what will it be after the dividend? b. If an investor owns 3000 shares before the dividend, what will be the total value of her investment in FCF before and after the dividend?
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