Shares in Growth Corporation are selling for $75 per share. There are 11 million shares outstanding....

Shares in Growth Corporation are selling for $75 per share. There are 11 million shares outstanding. The stock pays a 25 percent stock dividend. After the dividend: How many shares will be outstanding? What will be the price per share?

Please state your answer in millions and to 2 decimal places.

Outstanding shares = million

Price per share =

Expert Solution


Outstanding Shares		13.75 million
Price Per Share		$ 60.00

There are two types of dividends are issued:

(a) Cash Dividend: Cash are given to shareholders
(b) Stock Dividends : Stock are given to shareholders

Stock Dividend	=	Existing number of outstanding shares	*	Stock Dividend Percentage

# 1				(million)
	Beginning number of shares outstanding	11
	Total			11

	New shares in the from of stock dividend
	11	*25%	=	2.75

	Total			13.75

# 2	Total Market Value before stock dividend	=	11	*	$ 75.00	=	$ 825.00	million
	Outstanding shares after stock split						13.75	million

	Price per share	=	$ 825.00	/	13.75	=	$ 60.00

jeff jeffy answered 2 years ago

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