Define effect of stock dividends and stock splits, Financial Management

Assignment Help:

What is the effect of stock (not cash) dividends and stock splits on the market price of common stock?  Why do corporations declare stock splits and stock dividends?

Stock splits and stock dividends reduce the price each share of the common stock but must not increase the total market value of all common stock outstanding if not other positive things are perceived to take place.  Several companies believe that a stock split or stock dividend makes their stock more affordable and hence more attractive to a wider range of potential investors.


Related Discussions:- Define effect of stock dividends and stock splits

What is corporate social responsibility, (a) The term "financial reporting"...

(a) The term "financial reporting" incorporates not only financial statements, but also includes other means of communicating financial and non-financial information. Financial rep

Which ratios is potential long term bond investor, Which ratios would a pot...

Which ratios would a potential long-term bond investor be most interested in? Explain. Potential and Current lenders of long-term funds, like banks and bondholders, are interest

Interpretations of activity ratio''s, Activity Ratio's   RT:        ...

Activity Ratio's   RT:           The Receivables Turnover ratio is the ratio between sales to accounts receivables. This says exactly how fast a company can collect on the s

Exchange requirements-, Exchange Requirements To ensure money supply, s...

Exchange Requirements To ensure money supply, some central banks require some or all of its foreign exchange receipts (generally from exports) be exchanged for the local curren

Sources of return, When an investor invests in fixed income sec...

When an investor invests in fixed income securities, he receives returns from one or more of the following sources: Coupon Interest payment.

Rationale for mergers, Rationale for Mergers Many of the motives behind...

Rationale for Mergers Many of the motives behind mergers of firms are discussed hereunder: Growth Growth is the most general and important motive for mergers. Merging f

International markets, Explain the random walk model for exchange rate fore...

Explain the random walk model for exchange rate forecasting. Can it be consistent with technical analysis?

Calculate the effective annual rate, I keep getting different answers in ex...

I keep getting different answers in excel and the financial calculator. is there someone who can walk me through this problem step by step: You plan to buy a new house for $250,0

Role of primary dealers, Role of Primary Dealers To promote the investm...

Role of Primary Dealers To promote the investment activity in the Government Securities market, several countries have adopted licensed Primary Dealers (PDs) as important inter

Principle of opportunity cost, Suppose you have recently been contracted as...

Suppose you have recently been contracted as a financial consultant to a London-based engineering company, Alpha Products Plc. The company uses three components as part of their pr

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd