Shares outstanding and stock is currently trading

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Luther industries currently has 5 million shares outstanding and its stock is currently trading at $40 per share

(a) Assuming Luther issues a 25% stock dividend, then Luther’s new share price is closest to: (1) $24.00 (2) $30.00 (3) $16.00 (4) $32.00

(b) Assuming Luther issues a 5:2 stock split, then Luther’s new share price is closest to: (1) $32.00 (2) $16.00 (3) $24.00 (4) $30.00

(c) Assuming Luther issues a 5:2 stock split, then the number of shares Luther will have outstanding after the split is closest to: (1) 25 million (2) 12.5 million (3) 2.0 million (4) 16 million

Reference no: EM131980774

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