Answer:
$4.8 per share annually
$1.20 per share quarterly
Explanation:
Stock Split is the issuance of additional share with proportion to the existing share holding. It increase the numbers of outstanding share of the company. Ir results in decrease in the market price of the share but the total market capitalization remains the same.
Dividend yield is the rate of dividend payment as per the market value of that share.
As per given data
Stock price = $60
Dividend yield = Dividend / Market Price
10% = Dividend / $60
Dividend = $60 x 10% = 46
On stock split, for every 2 shares, there will now be 3 shares. Shares are increase by 1.5 times (3/2).
After Stock Split
Share price = $60 / 1.5 = $40
Annual dividend amount per share before the increase
Dividend = $6.00 / 1.5 = $4.00 per share
Annual dividend amount per share before the increased by 20%
Dividend = $4 x 120% = $4.80 per share
Quarterly dividend payment = $4.80 / 4 = $1.20 per share
