Suppose you own 250 shares of Sabina Gold & Silver Corp

Finance Dec 25, 2020

Suppose you own 250 shares of Sabina Gold & Silver Corp. The earnings per share is $0.20, the dividend per share is $0.06 and the stock sells for $1.50 per share. The firm has just announced a 1:5 reverse stock split. Immediately after the split, how many shares will you have, what will be the new Earnings per Share, Dividend per share, and the expected stock price immediately after the split?

Expert Solution

Number of shares=250/5=50.00

Earnings per share=0.20*5=1.00

Dividend per share=0.06*5=0.30

Price per share=1.50*5=7.50

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