Asked by Jackeline Nunez Salgado on Jun 01, 2024
Verified
Tellabs distributes a 15% stock dividend. Before distributing the stock dividend, Tellabs had 15 million shares. How many outstanding shares does the firm have after it makes the stock dividend distribution?
A) 15 million shares
B) 17 million shares
C) 17.25 million shares
D) 17.50 million shares
E) none of the above
Stock Dividend
A dividend payment made in the form of additional shares rather than cash, reflecting a company's desire to reinvest its profits.
Outstanding Shares
The total number of shares of stock that are currently owned by investors, including restricted shares owned by the company’s officers and insiders.
Distribution
The process of delivering products from the production or service facility to the end user, including storage, transportation, and logistics.
- Analyze and calculate the number of outstanding shares after stock dividends and stock splits.
Verified Answer
ZK
Zybrea KnightJun 02, 2024
Final Answer :
C
Explanation :
A 15% stock dividend on 15 million shares results in an additional 2.25 million shares (15 million * 0.15 = 2.25 million). Therefore, after the distribution, Tellabs has 17.25 million shares outstanding (15 million + 2.25 million).
Learning Objectives
- Analyze and calculate the number of outstanding shares after stock dividends and stock splits.