AKS’ stock price has been gradually declining in the last 6 months. It is down 5%...
AKS’ stock price has been gradually declining in the last 6 months. It is down 5% from the prior year. In order to boost its stock price, AKS announced in January 2023 that it would issue a 10% stock dividend in May 2023. what happens to the fair value?
Homework Answers
Though stock dividends do not result in any actual increase in value for investors at the time of issuance, they have an effect on stock price similar to that of cash dividends. After declaration of a stock dividend, the stock's price often increases.
Stock dividends have no effect on the total amount of stockholders' equity or on net assets. They merely decrease retained earnings and increase paid-in capital by an equal amount. Immediately after the distribution of a stock dividend, each share of similar stock has a lower book value per share.
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AKS’ stock price has been gradually declining in the
last 6 months. It is down 5%...
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