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The Andre Group is one of Cold Duck’s leading competitors. Andre’s market intelligence research team has...

The Andre Group is one of Cold Duck’s leading competitors. Andre’s market intelligence research team has learned of Cold Duck’s stock split plans, and is considering paying a stock dividend in response. As a result, executives at Andre decide to pay stock dividends to its shareholders. A stock dividend is another way of keeping the stock price from going too high. The Andre Group currently has 1,100,000 shares of common stock outstanding.

If Andre pays a 7% stock dividend, how many new shares will the firm issue to its existing shareholders?

69,300 shares

65,450 shares

61,600 shares

77,000 shares

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Answer #1

New Shares = No.of Shares outstanding*Stock Dividend % 1100000*7% 77,000 shares

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