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Answer: 1 Price After Split Price Before Split Old Share New Share 2 Total Share Total Stock Before Split Stock Split P6-1

The document discusses various stock market concepts: 1) A stock split example where an investor owns 200 shares pre-split trading at $40, and after a 5-for-3 split each share is worth $24 and the investor owns 333 shares. 2) Calculating market capitalization as the stock price multiplied by shares outstanding, such as $8.97 billion for a stock at $23 with 390 million shares. 3) Dividend yield is calculated by dividing the annual dividend by the stock price, such as 10.5% yield for a stock at $35 paying $0.92 quarterly. 4) Dividend payout ratio shows what percentage of profits are paid

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Kristo Febrian Suwena -
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379 views7 pages

Answer: 1 Price After Split Price Before Split Old Share New Share 2 Total Share Total Stock Before Split Stock Split P6-1

The document discusses various stock market concepts: 1) A stock split example where an investor owns 200 shares pre-split trading at $40, and after a 5-for-3 split each share is worth $24 and the investor owns 333 shares. 2) Calculating market capitalization as the stock price multiplied by shares outstanding, such as $8.97 billion for a stock at $23 with 390 million shares. 3) Dividend yield is calculated by dividing the annual dividend by the stock price, such as 10.5% yield for a stock at $35 paying $0.92 quarterly. 4) Dividend payout ratio shows what percentage of profits are paid

Uploaded by

Kristo Febrian Suwena -
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Stock Split

Answer :
P6-1 : 1 Price after Split
An investor owns some stock in Harry’s Pottery Inc. The
stock recently underwent a 5-for-3 stock split. If the Price Before Split
stock was trading at $40 per share just before the split,
Old Share
how much is each share most likely selling for after the
split? If the investor owned 200 shares of the stock New Share
before the split, how many shares would she own
afterward? 2 Total Share

Total stock before split


Price after Split $ 24 per Share

Price Before Split $ 40


3
New Share 5

Total Share 333 Share

Total stock before split 200


Market Capitalization
Answer :
P6-4 : Price $ 23
Ben’s Burgers is trading at $23 per share. There Share Outstanding 390
are 390 million shares outstanding. What is the
market capitalization of this company? Market Capitalization $ 8,970
Million

Million
Dividend Yield

P6-8 : Market Price $ 35


Coastal Rail is currently trading at $35 per share. Annual Dividend $ 3.68
The company pays a quarterly dividend of $0.92
per share. What is the dividend yield?
Dividend Yield 10.5%

Quarterly dividend 0.92


4
Answer :
Dividend Payout Ratio
Net Profit $ 750
P6-9 : Share Outstanding $ 600
Mountain Rail has a net profit of $750 million. It Dividend per share $ 1.1
has 600 million shares outstanding and pays
annual dividends of $1.1 per share. What is the
dividend payout ratio? EPS 1.25

Dividend Payout Ratio 88%


Million
Million

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