The Strasburg Company’s stock currently trades at $90 per share. Below is their partial balance sheet: Common Stock (1,500,000 shares outstanding) 30,000,000 Retained Earnings 15,000,000 Total 45,000,000
a) The company is considering a 3 for 2 stock split. What will be the company’s stock price following the stock split? How many shares will be outstanding? Show any changes to the Balance sheet.
b) If instead, the company does a 7% stock dividend. What will be the company’s stock price following the stock dividend? How many shares will be outstanding? Show any changes to the Balance sheet.