Outpost has 2 million shares of common stock outstanding; net income is 300,000; the P/E ratio is 9; and
management is considering an 18 stock dividend.
What will be the expected effect on the price of the common
stock? If an investor owns 300 shares in the company, how does this change his total value? Explain.
Question 2
The inventory loan agreement in which the lender can increase his or her security interest by
having specific items of inventory identified in the loan agreement is called
A) a chattel mortgage agreement. B) a field warehouse agreement.
C) inventory identification agreement. D) a floating lien agreement.