Tellabs distributes a 15% stock dividend. Before distributing the stock dividend, Tellabs had 15 million shares. How many outstanding shares does the firm have after it makes the stock dividend distribution?

Question

Quizplus · Accepted Answer

A 15% stock dividend on 15 million shares results in an additional 2.25 million shares (15 million * 0.15 = 2.25 million). Therefore, after the distribution, Tellabs has 17.25 million shares outstanding (15 million + 2.25 million).

Tellabs Distributes a 15% Stock Dividend