Use the Following Information to Answer the Following Question(s)

question 87

Multiple Choice

Use the following information to answer the following question(s) .
Your firm is planning to pay a 15% share dividend.The market price for the share has been $84.The table below presents the equity portion of your firm's balance sheet before the dividend.
Common share

-StudioNinety's board of directors announced a quarterly dividend of 25 cents.The ex-dividend date is November 3.On November 2, StudioNinety's share closed at $40.00 per share.What is the most likely opening price on November 3?

• A)$40.25
• B)$39.75
• C)$41.00
• D)$39.00

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Definitions:

Sarbanes-Oxley Act

An act that criminalizes specific nonaudit services when provided by a registered accounting firm to an audit client; also increases the punishment for a number of white-collar offenses. Also known as the Public Company Accounting Reform and Investor Protection Act of 2002.

Investment Company Act

A U.S. federal law enacted in 1940 aimed at regulating investment companies to protect investors by enforcing transparency and reducing conflicts of interest.

Finance Companies

Businesses that provide loans to individuals or corporations, excluding banks and other traditional financial institutions.

Debentures

A type of debt instrument not secured by physical assets or collateral but based on the issuer's creditworthiness and reputation.