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Gilligan Corporation was established on February 15,2014.Gilligan is authorized to issue 500,000 shares of $6.00 par value common stock.As of December 2016,Gilligan's stockholders' equity accounts report the following balances:
At the end of 2016,Gilligan decides to issue a 5% stock dividend.
At the time of issue,the market price of the stock was $22 per share.

-Calculate the number of shares outstanding after the stock dividend is issued.

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Gilligan Corporation was established on February 15,2014.Gilligan is authorized to issue 500,000 shares of $6.00 par value common stock.As of December 2016,Gilligan's stockholders' equity accounts report the following balances:
At the end of 2016,Gilligan decides to issue a 5% stock dividend.
At the time of issue,the market price of the stock was $22 per share.
 
-Calculate the number of shares outstanding after the stock dividend is issued.

Quizplus · Accepted Answer

The number of shares outstanding after a stock dividend is calculated by adding the stock dividend to the existing shares. Assuming the stock dividend is 5% and the original shares are 55,000, the calculation would be 55,000 + (55,000 * 0.05) = 57,750 shares.

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