Problem 14.06 – Stockton Mineral Operations (SMO) or Bermuda Triangle Corporation (BTC)
Essentials of Corporate Finance
Ross, Westerfield, and Jordan
10th Edition and 11th Edition
Stockton Mineral Operations, Inc. (SMO) or Bermuda Triangle Corporation (BTC) currently has a certain number of shares of stock that sell for a certain price per share. Assuming no market imperfections or tax effects, what will the share price be after:
- SMO or BTC has a certain type of stock split?
- SMO or BTC has a certain percent stock dividend?
- SMO or BTC has a reverse stock split?
Calculate the new share price and the new number of shares outstanding for each scenario.
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