Nu Tech, Inc. is a technology ﬁrm with good growth prospects. The ﬁrm wishes to do something to acknowledge the loyalty of its shareholders but needs all of its available cash to fund its rapid
Growth. The market price of its stock is currently trading in the middle of the preferred trading
Range. The ﬁrm could consider:

Question

Quizplus · Accepted Answer

Issuing a stock dividend would allow Nu Tech, Inc. to acknowledge the loyalty of its shareholders without using its available cash. This would also increase the number of shares outstanding and potentially decrease the market price per share, making it more accessible to new investors. This option would also not disrupt the preferred trading range of the stock.