Able Corp. plans a 10% stock dividend. Its current share price is $50 and there are 100,000 shares outstanding. Mary owns 500 shares of Able and will receive_____ added shares, and the stock will be priced at _____ . After the 10% stock dividend is paid she will have a total market value of_____ ?
A) 100; $50; $30,000
B) 50; $40; $27,500
C) 50; $45.45; $25,000
D) 10; $40; $20,400

Question

Quizplus · Accepted Answer

Mary will receive 10% of 500 shares, which is 50 added shares. The new stock price will be $50 / 1.10 = $45.45. Her total market value will be 550 shares * $45.45 = $25,000.

Able Corp Plans a 10% Stock Dividend