Tutor profile: Maddy L.
What is the difference between a stock split and a stock dividend? Which is more favorable?
A stock split happens when a company decides to divide the number of shares outstanding into smaller units. A common ratio in stock splits is 2:1, meaning while an individual owned one share of stock worth $20 pre-split, they now own two shares worth $10 each. A stock dividend is a payment made to a shareholder in the form of stock rather than cash. A company might choose to issue a stock dividend if they wish to use the cash that would otherwise be distributed for other purposes, such as investing in a new project. When evaluating which option is more favorable, the answer depends on the preferences of the shareholder. If the shareholder is looking to make a profit from cash dividends, a company issuing a stock split would be the more favorable option. If the shareholder is interested in a company with high growth potential, one option is not necessarily better than the other, because both result in the investor owning more shares of stock than previously.
Name the financial statements. Which is most commonly used in analyzing a company?
The four financial statements include the Balance Sheet, Income Statement, Statement of Cash Flows, and Statement of Stockholders' Equity. When analyzing the health of a company, it is most common to use the Income Statement because it demonstrates the ability of the company to generate a profit.
On Pine Street, there are twice as many dogs as cats. In total, there are 21 pets (cats and dogs). How many dogs live on Pine Street?
First, you want to assign letters to the variables. We use "D" for dog and "C" for cat. Next, you want to set up the relevant equations: "there are twice as many dogs as cats" can be written as D = 2C "there are 16 pets (cats and dogs)" can be written as C + D = 21 Having outlined the relevant equations, you want to plug the value of "D" into the second equation to make it easier to solve for one of the variables: C + 2C = 21 3C = 21 C = 7 There are 7 cats on the block. Knowing this, we can plug C = 7 back into our original equation, D = 2C. D = 2*7 D = 14 There are 14 dogs on the block.
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