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Assume that when you were in high school you saved $1,000\$ 1,000 to invest for your college education. You purchased 200 shares of Smiley Incorporated, a small but profitable company. Over the three years that you have owned the stock, the corporation's board of directors have taken the following actions:

  1. Declared a 2-for-1 stock split.
  2. Declared a 20 percent stock dividend.
  3. Declared a 3-for-1 stock split.
    The current price of the stock is $12\$ 12 per share.
    c. State your opinion as to whether or not you would have been better off if the board of directors had declared a cash dividend instead of the stock dividend and stock splits.

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Answered 10 months ago
Answered 10 months ago
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For this exercise, we are required to express our opinion as to whether or not shareholders are probably better off if cash dividends were declared instead of stock dividends.

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