Assume that you own 14,000 shares of Briant Inc.'s common stock and that
you currently receive cash dividends of $1.68 per share per year.
Required:
If Briant Inc. declared a 5% stock dividend, how many shares of common stock would you receive as a dividend?
b. Calculate the cash dividend per share amount to be paid after the stock dividend that would result in the same total cash dividend (as was
received before the stock dividend).
c. If the cash dividend remained at $1.68 per share after the stock dividend, what per share cash dividend amount without a stock dividend
would have accomplished the same total cash dividend?
d. Why might a company consider having a dividend policy of paying a $0.30 per share cash dividend every year and also issuing a 5%
stock dividend every year?
