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ifiwasu
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Posted on 11-04-08 11:17
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a)
You own 100 shares of Troll Brothers’ stock, which currently sells for $120 a share. The company is contemplating a 2-for-1 stock split. Which of the following best describes what your position will be after such a split takes place?
- You will have 200 shares of stock, and the stock will trade at or near $120 a share.
- You will have 200 shares of stock, and the stock will trade at or near $60 a share.
- You will have 100 shares of stock, and the stock will trade at or near $60 a share.
- You will have 50 shares of stock, and the stock will trade at or near $120 a share.
b)
Based on the information below, what is Ezzel Enterprises' optimal capital structure?
- Debt = 40%; Equity = 60%; EPS = $2.95; Stock price = $26.50.
- Debt = 50%; Equity = 50%; EPS = $3.05; Stock price = $28.90.
- Debt = 60%; Equity = 40%; EPS = $3.18; Stock price = $31.20.
- Debt = 80%; Equity = 20%; EPS = $3.42; Stock price = $30.40.
Interesting questions.....enjoy answering them....
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neerman
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Posted on 11-04-08 11:30
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I think the answer is b.You will have 200 shares of stock, and the stock will trade at or near $60 a share.
Please follow this explanation:
What is a 2-for-1 stock split?
A1 . A 2-for-1 stock split means that a stockholder will have twice as many shares as they had before the stock split with each share valued at approximately half the pre-split market price.
Here’s an example: As of the Record Date (August 1, 2006) if a stockholder owns 100 shares of OXY and the market price was $100.00 per share, that stockholder’s total investment value is $10,000. After the stock split, the stockholder will have 200 shares of stock but the market price will be approximately $50.00 per share. The stockholder’s total investment value remains the same at $10,000 until the stock price moves up or down
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Nepali Thita
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Posted on 11-04-08 1:28
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neerman, why are you trying to help for such a simple question.... Let him do on his own...He sosent deserve a Degree if cannot do this simple shit..
ifiwasu, dont make sajha a mess with your homework....
NepaliThita
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