A Company Whose Stock Is Selling for $45 Has the Following

question 34

Essay

A company whose stock is selling for $45 has the following balance sheet: $\begin{array}{ll}\text { Assets }\quad\$32,000\quad\quad\quad\text { Liabilities }\quad\$10,000\\\text { Common stock }&6,000\\\text { (\$6 par; 1,000 }\text { shares issued) }\\\text { Additional paid-in capital }&2,000\\\text { Retained eamings }&14,000\end{array}$
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a. Construct a new balance sheet showing a 3 for 1 stock split. What is the new price for the stock?
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b. What would be the balance sheet if the firm paid a 10 percent stock dividend (instead of the stock split)?
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Definitions:

Ethical Dilemmas

Situations in which a choice must be made between two or more morally conflicting options, with no clear right or wrong answer.

Obedience Research

The study of how individuals comply with orders or commands from those of higher authority, often explored through experiments and psychological evaluations.

Replication

The process of repeating a research study or experiment to verify its findings.

Solomon Asch Experiment

A series of psychological experiments conducted by Solomon Asch, demonstrating the power of conformity in groups.