The market price of a share of Omega 3 Corporation's common shares is $110. If Omega 3 Corporation declares and issues a 30% stock dividend, the market price will, in theory, adjust to
Approximately:

Question

Quizplus · Accepted Answer

After a 30% stock dividend, each shareholder will have 30% more shares, but the total market value remains the same, leading to a decrease in the price per share. The new price can be calculated as the old price divided by 1 plus the dividend percentage: $110 / (1 + 0.30) = $110 / 1.30 ≈ $84.62, which is approximately $85.

The Market Price of a Share of Omega 3 Corporation's