An Investor Holds 100 Shares of a Company That Is

question 55

Multiple Choice

An investor holds 100 shares of a company that is about to make a bonus issue of five shares for every two held.If the shares are currently trading for $2.50,what will be the value of the holding after the bonus issue?

• A) $200
• B) $250
• C) $400
• D) $500

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Definitions:

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash.

Excess Cash

Funds that exceed the necessary operating and investment cash required by a business, often indicating potential for dividends, buybacks, or investments.