Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
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Chapter 14, Problem 5P
Summary Introduction
To determine: Company’s new stock price by considering the stock split.
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JPix management is considering a stock split. JPix currently sells for$120 per share and a 3-for-2 stock split is contemplated. What will be thecompany’s stock price following the stock split, assuming that the split hasno effect on the total market value of JPix’s equity?
Presently, your company’s Face Value of Equity Share RO 10 and Market Value of your Share in MSM is RO 25 per share. In order to increase the trading volume and market liquidity of your company stock, will you suggest the management to go for stock split? Explain your management about concept of stock slip with the advantage of splitting the stock of your company with the current scenario.
Emergency Medical’s stock trades at $145 a share. The company is contemplatinga 3-for-2 stock split. Assuming that the stock split will have no effect on the marketvalue of its equity, what will be the company’s stock price following the stock split?
Chapter 14 Solutions
Financial Management: Theory & Practice
Ch. 14 - How would each of the following changes tend to...Ch. 14 - What is the difference between a stock dividend...Ch. 14 - One position expressed in the financial literature...Ch. 14 - Indicate whether the following statements are true...Ch. 14 - Puckett Products is planning for $5 million in...Ch. 14 - Petersen Company has a capital budget of 1.2...Ch. 14 - The Wei Corporation expects next year’s net income...Ch. 14 - A firm has 10 million shares outstanding with a...Ch. 14 - Prob. 5PCh. 14 - Gardial GreenLights, a manufacturer of...
Ch. 14 - Suppose you own 2,000 common shares of Laurence...Ch. 14 - Fauver Enterprises declared a 3-for-1 stock split...Ch. 14 - Harris Company must set its investment and...Ch. 14 - Boehm Corporation has had stable earnings growth...Ch. 14 - Prob. 11PCh. 14 - Bayani Bakerys most recent FCF was 48 million; the...Ch. 14 - Integrated Waveguide Technologies (IWT) is a...Ch. 14 - Discuss the effects on distribution policy...Ch. 14 - c. (1) Assume that IWT has completed its IPO and...Ch. 14 - (1) Describe the procedures a company follows when...Ch. 14 - Discuss the advantages and disadvantages of a firm...Ch. 14 - Suppose IWT has decided to distribute 50 million,...Ch. 14 - Describe the series of steps that most firms take...Ch. 14 - What are stock splits and stock dividends? What...Ch. 14 - What is a dividend reinvestment plan (DRIP), and...
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- Emergency Medical's stock trades at $140 a share. The company is contemplating a 3-for-2 stock split. Assuming that the stock split will have no effect on the market value of its equity, what will be the company's stock price following the stock split? Round your answer to the nearest cent.arrow_forwardMid-State BankCorp recently declared a 7-for-2 stock split. Prior to the split, the stock sold for $100 per share. If the firm's total market value is unchanged by the split, what will be the stock price following the split?arrow_forward(iii) Presently, your company’s Face Value of Equity Share RO 10 and Market Value of your Share in MSM is RO 25 per share. In order to increase the trading volume and market liquidity of your company stock, will you suggest the management to go for stock split? Explain your management about concept of stock slip with the advantage of splitting the stock of your company with the current scenario. (iv) Given the current scenario COVID 19 and its impact on Cement sector in the near future, what are the factors that you consider affecting the dividend policy of your company? Critically evaluate and justify.arrow_forward
- Automotive Supplies Inc’s Stock trades at $50 a share. The company is contemplating a 4-for-3 stock split. Assuming that the stock split will have no effect on the market value of its equity, what will be the company’s stock price following the stock split? Select one: a. $50.00 b. $80.00 c. $75.00 d. $37.50arrow_forwardWorldTrans is considering a 8-for-4 stock split. The current stock price is $75.00 per share, and the firm believes that its total market value would increase by 6% as a result of the improved liquidity that should follow the split. What is the stock's expected price following the split? Group of answer choices $40.15 $41.34 $47.30 $31.40 $39.75arrow_forwardc) Let us say, the stock exchange listing requirements stipulate that once the share of your company trades at a price of $20 or less, the share will be delisted from the exchange and no further trades will be allowed. You observe that currently the share of your company is trading at around $25 per share on the stock exchange. What do you recommend in such a situation: A stock split or a reverse stock-split? Why?arrow_forward
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