15) On May 20, Team Shirts paid a 10% stock dividend to shareholders of record on June 15.
On June 15, there were 100,000 shares of stock outstanding. How many shares of Team Shirts’ stock were outstanding after the stock dividend was paid?
16) On November 1, Team Shirts announced a 3-for-1 stock split to be effective on November 15. On November 15, there were 335,000 shares of stock outstanding. How many shares of Team Shirts’ stock were outstanding after the stock split?
17) On February 1, Team Shirts announced a 4-for-1 stock split to be effective on February 15. On February 1, there were 45,000 shares of $1.00 par value common stock outstanding.
1. How many shares of Team Shirts’ stock were outstanding after the stock split?
2. What is the new par value per share?
18) Team Shirts would like to start paying dividends to its loyal shareholders; however, it believes that the business cannot spare the cash for dividends. Explain how Team Shirts could use a stock split or stock dividend to reward shareholders instead of paying a cash dividend.
19) Explain the difference between a stock dividend and stock split.