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72. A firm has retained earnings of $11 million, a common shares account of $2 million, and
additional paid-in-capital of $6 million, and the firm just paid a 15 percent stock dividend.
Assume that fair market value is reflected in the relative size of both the common shares account
and the additional paid-in-capital account. Which of the following statements is correct?
73. A firm has retained earnings of $6 million, a common shares account of $3 million, and
additional paid-in-capital of $6 million, and the firm just paid a 10 percent stock dividend.
Assume that fair market value is reflected in the relative size of both the common shares account
and the additional paid-in-capital account. What are the new levels in each account?
74. MMK Cos. normally pays an annual dividend. The last such dividend paid was $2.00, all
future dividends are expect to grow at a rate of 6 percent per year, and the firm faces a required
rate of return on equity of 13 percent. If the firm just announced that the next dividend will be an
extraordinary dividend of $22 per share that is not expected to affect any other future dividends,
what should the stock price be?
75. GBH Inc. is planning on announcing a 5-for-2 stock split. The stock is currently trading at
$90 per share. Based on this information, what will be the new stock price?
76. GBH Inc. is planning on announcing a 2-for-5 stock split. The stock is currently trading at
$12 per share. Based on this information, what will be the new stock price?
77. GBH Inc. is planning on announcing a 7-for-3 stock split. The stock is currently trading at
$119 per share. Based on this information, what will be the new stock price?
78. Which of the following statements is correct?
79. Which of the following statements is correct?
80. Which of the following is a reason for a firm to announce a stock split?
81. Which of the following statements is incorrect?
82. Brady inherited 1,000 shares of LNM, Inc. The stock is selling in the market for $177 per
share and the company is contemplating a 2-for-6 stock split. Given this information, which of
the following statements is correct?
83. Brady inherited 500 shares of LNM, Inc. The stock is selling in the market for $92 per
share and the company is contemplating a 5-for-3 stock split. Given this information, which of
the following statements is correct?
84. Brady inherited 1,750 shares of LNM, Inc. The stock is selling in the market for $82 per
share and the company is contemplating a 1-for-3 stock split. Given this information, which of
the following statements is correct?
85. In 2004, Microsoft paid one of the largest extraordinary dividends in history. All of the
following contributed to this historical event EXCEPT:
86. The first day that the shares will trade without the dividend attached is referred to as
the:
87. On the _____________, the firm will look on its books to find the registered owners so that
they can start addressing payments.
88. The board of directors announces its intention to pay a dividend on the:
89. Which of the following statements is correct?
