Calculating stock dividends and cash dividends

Reference no: EM1337306

Assume that you own 3,000 shares of Blueco, Inc.'s common stock and that you currently receive cash dividends of $.42 per share per year.

a. If Blueco, Inc., declared a 5% stock dividend, how many shares of common stock would you receive as a dividend?

b. Calculate the cash dividend per share amount to be paid after the stock dividend that would result in the same total cash dividend (as was received before the stock dividend).

c. If the cash dividend remained at $.42 per share after the stock dividend, what per share cash dividend amount without a stock dividend would have accomplished the same total cash dividend?

d. Why would a company have a dividend policy of paying a $.10 per share cash dividend and issuing a 5% stock dividend every year?

Reference no: EM1337306

Questions Cloud

Explain with the advent of the internet : Explain with the advent of the Internet and will segmentation become more or less prevalent

Find a set of criteria for assessment of video clips : find a set of criteria for assessment of video clips suitable for inclusion in Multimedia presentations over the web. Discuss your choices and where they differ from choices you would make for a CD presentation.

Issues of the treasury department : Due to these issues the Treasury Department are not paying incentive payments to these banks.

Create a risk identification checklist : Create a risk identification checklist, and Update risk management documents. Procedure

Calculating stock dividends and cash dividends : Suppose that you own 3,000 shares of Blueco, Inc.'s common stock and which you currently receive cash dividends of $.42 per share per year.

Corporate, business and functional level strategy : Discuss the difference between the corporate, business and functional level strategy.

Explain about promotional mix : Explain about Promotional Mix and Consider the different types of promotional tools they can use and determine which one would be the most effective

Define the importance of bandwidth : define the importance of bandwidth

Intermediate punishments : What are intermediate punishments? What are their benefits and disadvantages?

User Account

All Pages