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    mszinastew's Avatar
    mszinastew Posts: 1, Reputation: 1
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    #1

    Apr 7, 2009, 05:19 AM
    record dividend declartion and its distribution
    On February 5, the directors declare a 15% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $50 per share on February 5 before the stock dividend. The stock’s market value is $43.60 per share on February 28.
    Perito's Avatar
    Perito Posts: 3,139, Reputation: 150
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    #2

    Apr 7, 2009, 05:37 AM

    15% of $50 (the day they declared the dividend) will turn out to be 17.2% on February 28, but the percentage (usually they don't declare it as a percentage -- they declare an amount) was decided on the day they declared the dividend.
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #3

    Apr 7, 2009, 05:45 AM

    Dividend = $50.00
    Ex Dividend **=$ 43.60
    ____________________

    Difference ****= $6.40. JUST ABOUT RIGHT!

    WHY? = 15% of $50 = $ 7.50.
    It should have gone down to $42.50
    BUT it maintained its value and actually rose
    $1.10.
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #4

    Apr 8, 2009, 02:10 AM

    You can't actually record this without knowing the number of shares outstanding. I'm assuming the problem has this information?
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