Market imperfections or tax effects


Dividends Roll Corporation currently has 220,000 shares of stock outstanding that sell for $82 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:

a. RC has a five-for-two stock split?

b. RC has a 18 percent stock dividend?

c. RC has a 43 percent stock dividend?

d. RC has a three-for-seven reverse stock split?

e. Determine the new number of shares outstanding in parts (a) through (d)

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Finance Basics: Market imperfections or tax effects
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