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Storico currently has 36,000 shares outstanding that sell for $48.05 per share. The company plans to issue a stock dividend of 12.5 percent. How many new shares will be issued?

Question

Storico currently has 36,000 shares outstanding that sell for $48.05 per share. The company plans to issue a stock dividend of 12.5 percent. How many new shares will be issued?

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Solution

To calculate the number of new shares that will be issued, you need to follow these steps:

  1. Identify the current number of shares outstanding, which is 36,000 shares.

  2. Identify the percentage of the stock dividend, which is 12.5%.

  3. Calculate the number of new shares to be issued by multiplying the current number of shares by the stock dividend percentage.

Mathematically, this can be represented as:

New Shares = Current Shares * Stock Dividend Percentage

So,

New Shares = 36,000 shares * 12.5%

= 36,000 * 0.125 (since 12.5% is equivalent to 0.125 in decimal form)

= 4,500 shares

Therefore, Storico will issue 4,500 new shares.

This problem has been solved

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