Assume that you own 172 shares of $16 par value common stock of a company and the company has a 2-for-1 stock split when the market price per share is $46. Required: a. How many shares of common stock will you own after the stock split? b. What will probably happen to the market price per share of the stock? c. What will probably happen to the par value per share of the stock? Shares of common stock after split: a. b. The market price per share should: C. The par value per share will:
Assume that you own 172 shares of $16 par value common stock of a company and the company has a 2-for-1 stock split when the market price per share is $46. Required: a. How many shares of common stock will you own after the stock split? b. What will probably happen to the market price per share of the stock? c. What will probably happen to the par value per share of the stock? Shares of common stock after split: a. b. The market price per share should: C. The par value per share will:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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hello, I need help please
Transcribed Image Text:Assume that you own 172 shares of $16 par value common stock of a company and the company has a 2-for-1 stock split when the
market price per share is $46.
Required:
a. How many shares of common stock will you own after the stock split?
b. What will přobably happen to the market price per share of the stock?
c. What will probably happen to the par value per share of the stock?
a. Shares of common ştock after split:
b. The market price per share should:
c. The par value per share will:
ces
Expert Solution
Step 1
a. Shares of common stock after split = Shares of common stock before split x split ratio
= 172 shares x 2/1
= 344 shares
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