IMHO Incorporated,a Management Consulting Provider,has Prospered During the Past Eight

question 49

Essay

IMHO Incorporated,a management consulting provider,has prospered during the past eight years,and recently the company's market share price has shot up to $206.00.It currently has 20,000 issued and outstanding common shares and no preferred shares exist with a book value of $200 per share.IMHO's management want to decrease the share price to the range of $65 to $75,which will be attractive to more investors.Should the company issue a 100 percent stock dividend or split the stock? Why? If you propose a stock split,state the split ration that will accomplish the company's objective.Show your computations.

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Definitions:

Property Taxes

Taxes levied by local governments based on the assessed value of real estate or other property owned.

Net Income

The amount of earnings left over after all operational, financial, and tax expenses have been deducted from revenues, indicating the company's profitability.

Segment Reporting

The practice of breaking down financial reports into divisions, product lines, or geographical markets to provide detailed financial information.