Question

Farrah owns 500 shares of stock valued at $30/share in Company A. After the company issues a 3% stock dividend, what does Farrah own

Answer 1

d) 515 shares valued at $29.13/share

Step-by-step explanation:

The computation is shown below:

As we know that the stock dividend does not rise the value of the stock

The number of shares in the given case is

= 500 shares × 1.03

= 515

Now the price would decrease to

= $30 ÷ (1 + 0.03)

= $29.13

hence, the correct option is d as farrah owns 515 shares that valued at $29.13 per share

The same is relevant