How Will Your Investment in Acme Corp

question 80

Essay

How will your investment in Acme Corp. change if you currently own 100 shares valued at $10 each and Acme has just declared a 10% stock dividend? Before the stock dividend there were 2,000 shares outstanding.

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Definitions:

Risk Averse

A tendency to prefer options that have fewer risks and more certain outcomes.

Net Earnings

The profit (or loss) of a business after all expenses have been deducted from revenues.

Probability

A measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.

Net Earnings Per Share

A financial ratio calculated by dividing the net income of a company by the average number of its outstanding shares, indicating the company's profitability per share.