The market value balance sheet for Inbox Manufacturing is shown here.Inbox has declared a 15 percent stock dividend.The stock goes ex-dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend).There are 13,000 shares outstanding.What is the ex-dividend stock price?

Question

Quizplus · Accepted Answer

To find the ex-dividend stock price, we need to first calculate the total number of shares after the stock dividend:

Total shares = 13,000 + (15% * 13,000) = 14,950

Then, we divide the total market value by the new number of shares:

Total Market Value / Number of shares = Ex-dividend stock price

$377,500 / 14,950 = $25.15

Therefore, the ex-dividend stock price is $25.15 (option B).

The Market Value Balance Sheet for Inbox Manufacturing Is Shown