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Suppose you own 5% of Bentley Corporation's 200,000 outstanding common shares
Suppose you own 5% of Bentley Corporation's 200,000 outstanding common shares. The stock was trading for $165 per share before Bentley executives announced a 50% stock dividend. After the stock dividend, you will own shares worth per share 10.000 5110 6667: 5247.50 15,000 5110 O 10.000 $165 15.000, 5165
Expert Solution
So, The Correct answer is 15000, 110
Stock dividend refers when the company pays dividend in form of stocks, this increases the number of Shares and decreases the share price
Shares owned by You = 5% * 200000
= 10,000 Shares
Now, Shares held by you after stock dividend = Current sahres owned by you * (1+Stock dividend)
= 10000 * (1+50%)
Number of shares = 15000 Shares
Share price after stock dividend = Share price before stock dividend / (1+Stock dividend%)
= 165 / (1+50%)
= 165/1.50
= 110
Share price after stock dividend = 110
So, The Correct answer is 15000, 110
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