After the payment of a 25% stock dividend, an investor has 500 shares of stock and $400.What did the investor have prior to the stock dividend?

Question

Quizplus · Accepted Answer

After a 25% stock dividend, the investor's number of shares increases by 25%. If they have 500 shares after the dividend, they had 400 shares before it (since 500 is 125% of 400). The cash amount remains unchanged by a stock dividend.

After the Payment of a 25% Stock Dividend, an Investor