SIE - Securities Industry Essentials Exam
CDE Corporation just declared a 10% stock dividend. Your client owns 600 shares at an average price of $20. What is your client's new position in CDE?
660 shares at $18.18 per shareA
600 shares at $18.18 per shareB
600 shares at $20 per shareC
$660 shares at $20 per shareD
This is a STOCK dividend, not a cash dividend. The dividend is paid in stock and results in the client getting 60 more shares. Since there was no out of pocket cost to the client, the new position is 660 shares at $18.18 per share.