Samson owns 1,500 shares out of the 10,000 outstanding shares of Comakote Corporation. If Comakote declares a stock dividend of 30 percent, what will be the total stock Samson has upon receiving his stock dividend?

Question

Quizplus · Accepted Answer

If there are 10,000 outstanding shares and Samson owns 1,500 shares, his percentage ownership is 15%.

After the stock dividend of 30%, there will be an additional 3,000 shares issued (30% of 10,000).

Samson's 1,500 shares will now represent 11.11% of the total outstanding shares (calculated as 1,500 / (10,000 + 3,000)).

To determine how many total shares Samson will have after the dividend, we can multiply his original number of shares (1,500) by the new percentage ownership (11.11%).

1,500 x 0.1111 = 166.65 (rounded to nearest whole number)

Adding this to his original 1,500 shares gives us a total of 1,666 shares.

Therefore, the correct choice is C: 1,950 shares.

Samson Owns 1,500 Shares Out of the 10,000 Outstanding Shares