Week 7 Discussion – The Pear Corporation and a Stock Split or Stock Dividend – Finacial Accounting


The Pear Corporation makes and distributes PC's and various peripheral devices to the Global Technical Consumer market. The company's global performance has been excellent and has driven its stock price above the preferred trading range of $ 50 per share and the company's board of directors is contemplating a strategy to reduce the stock price.

They are either a stock split or stock dividend strategy to develop more shareholder wealth and at the same time lower the stock's trading price to the more normal and affordable trading range. As the investment banker for the Pear Corporation you should recommend the best financial strategy for them that will:

A. A. Lower the stock price and allow for more trading volume.

B. B. Enhance current shareholder wealth

C. C. Keep the long-term growth prospects for the company intact.

Please provide some reasons for your decision and what the long-term effects will be for the Pear Corporation.you decision and what the long-term effects will be for the Pear Corporation.


Text: Financial Accounting: Tools for Business Decision Making Author: Kimmel, Weygandt, Kieso Publisher: Wiley Ed / Year: 7th / 2013 ISBN-13 (hard cover): 978-1118162286 ISBN (e-text): 978-1118562178

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