Ompanies sometimes consider stock splits to bring down the price so that the stock attracts more purchases. Consider the following case: Mainway Toy Company currently has 25,000 shares of common stock outstanding. Its management believes that its current stock price of $105 per share is too high. The company is planning to conduct stock splits in the ratio of 3 for 1 as described in the animation. If Mainway Toy Company declares a 3-for-1 stock split, the price of the company’s stock after the split, assuming that the total value of the firm’s stock remains the same after the split, will be . Scorecard Athletics Corp. is one of Mainway’s leading competitors. Scorecard Athletics Corp.’s market intelligence research team shares Mainway’s plans of announcing a stock split, influencing the distribution policy makers. Consequently, executives at Scorecard decide to offer stock dividends to its shareholders. A stock dividend is another way of keeping the stock price from going too high. Scorecard currently has 1,300,000 shares of common stock outstanding. If the firm pays a 5% stock dividend, how many shares will the firm issue to its existing shareholders? 58,500 shares 48,750 shares 68,250 shares 65,000 shares