Problem
Inland Co., has a total of 40,000 shares of common stock outstanding and no preferred stock. Total stockholders' equity at the end of the current year amounts to $2.5 million, and the market value of the stock is $33 per share. At year-end, the company declares a 5 percent stock dividend-one share for each 10 shares held. If all parties concerned clearly recognize the nature of the stock dividend, what should you expect the market price per share of the common stock to be on the ex-dividend date?
Five events pertaining to Lubbock Manufacturing Co. are described as follows.
i. Declared and paid a cash dividend.
ii. Issued a 10 percent stock dividend.
iii. Issued a 2-for-1 stock split.
iv. Purchased treasury stock.
v. Reissued the treasury stock at a price greater than the purchase price.
Indicate the immediate effects of the events on the financial measurements in the four-column headings listed. Use the code letters I for increase, D for decrease, and NE for no effect.