Outpost Has 2 Million Shares of Common Stock Outstanding; Net

question 110

Essay

Outpost has 2 million shares of common stock outstanding; net income is $300,000; the P/E ratio is 9; and management is considering an 18% stock dividend.What will be the expected effect on the price of the common stock? If an investor owns 300 shares in the company,how does this change his total value? Explain.

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Definitions:

Deuteranopia

A color vision deficiency where individuals cannot distinguish between red and green colors, a common type of red-green color blindness.

Rhodanopsia

A visual condition where there is a predominance of red in the visual field, often after looking at bright light.

Lateral Geniculate Cells

Neurons in the lateral geniculate nucleus, a part of the thalamus in the brain that processes visual information received from the retina.

Simple Cortical Cells

Neurons in the visual cortex that respond to specific orientations of edges and lines, contributing to visual processing.