Which increases a shareholder wealth more, a stock dividend or a stock split?
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I do not need an essay, I just need the following questions answered.
1. Which increases a shareholder wealth more, a stock dividend or a stock split?
2. What three conditions must exist for dividends to be paid?
3. When is a company required to pay dividends to shareholders?
4. Assets – Liabilities = Equity. So, theoretically, a company’s “worth” is equal to its owners’ equity. Theoretically……..
Walmart’s total equity is about $87.5 billion. So, we might think that Walmart is worth about $87.5 billion.
But, what would it cost to buy 100% of Walmart?
Walmart has about 2.8 billion shares of common stock outstanding. The current market price per share is about $150 (as of 8/17/21). So, to buy all of Walmart’s outstanding stock would cost $150 times 2.8 billion, or about $420 billion. (This is called market capitalization.)
Even though equity is only $87.5 billion it would actually cost $420 billion to buy all of Walmart.
So, what’s going on?
If the balance sheet says Walmart is worth about $87.5 billion why is the total stock value around $420 billion?
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