A5 10ai
10. The management of Oodles N Noodles Inc. is contemplating a 20% stock dividend. The company currently has cash of $300,000, fixed assets of $3.5 million, and debt of $1 million. Its net income for the most recent fiscal year was $500,000. The company’s shares are currently selling for $15 per share, and it has one million shares outstanding. Assume that there are no costs associated with issuing a stock dividend.
ai. Before issuing the stock dividend, the company’s management would like to know the effect of such a stock dividend on the following:
aii. The number of shares outstanding
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