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Bermuda Triangle Corporation (BTC) currently has 320,000 shares of stock outstanding that sell for $95 per share
Bermuda Triangle Corporation (BTC) currently has 320,000 shares of stock outstanding that sell for $95 per share. Assume no market imperfections or tax effects exist. Determine the share price and new number of shares outstanding if (Do not round intermediate calculations. Round your price per share answers to 2 decimal places, e.g., 32.16, and shares outstanding answers to the nearest whole number, e.g., 32.) a. BTC has a five-for-three stock split b. BTC has a 12 percent stock dividend. c. BTC has a 38.5 percent stock dividend d. BTC has a four-for-seven reverse stock split Price per share Shares outstanding b. Price per share Shares outstanding c. Price per share Shares outstanding d. Price per share Shares outstanding
Expert Solution
a
Price after split = Current price/split ratio
=95/(5/3) = 57
Shares after split = Current shares*split ratio
=320000*5/3 = 533333
b
Price after split = Current price/(1+stock dividend%)
=95/(1+0.12)=84.82
Shares after split = Current shares*(1+stock dividend %)
=320000*(1+0.12)=358400
c
Price after split = Current price/(1+stock dividend%)
=95/(1+0.385)=68.59
Shares after split = Current shares*(1+stock dividend %)
=320000*(1+0.385) =443200
d
Price after split = Current price/split ratio
=95/(4/7) = 166.25
Shares after split = Current shares*split ratio
=320000*4/7 = 182857
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