Use the Information for the Question(s)below

question 69

Multiple Choice

Use the information for the question(s) below.
Luther Industries currently has 5 million shares outstanding and its stock is currently trading at $40 per share.
-Assuming Luther issues a 25% stock dividend,then Luther's new share price is closest to:

• A)$24.00.
• B)$30.00.
• C)$16.00.
• D)$32.00.

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Definitions:

Cash Dividends

Payments made by a company to its shareholders from its profits or reserves, representing a share of the corporate earnings.

Financing Activities

Transactions and events that affect long-term liabilities and equity of a company, including issuing debt, repaying loans, and distributing dividends.

Fiscal Year

A one-year period used by governments and businesses for accounting and financial reporting, which may or may not align with the calendar year.

Depreciation Expense

Spreading out the expense of a physical asset over the period it's in use.