Assume the company announced a 2-for-1 stock split, Before the split, the company's total capitalization was $5 million, after tax income was $0.5 million and the company had 1 million shares outstanding. What was the stock price after the split? Da) $2.5 b) $0.25 o c) $10 d) $5

Assume the company announced a 2-for-1 stock split, Before the split, the company's total capitalization was $5 million, after tax income was $0.5 million and the company had 1 million shares outstanding. What was the stock price after the split? Da) $2.5 b) $0.25 o c) $10 d) $5

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Assume the company announced a 2-for-1 stock split. Before the split, the
company's total capitalization was $5 million, after tax Income was $0.5 million and
the company had 1 million shares outstanding.
What was the stock price after the split?
Oa) $2.5
O b) s0.25
c) $10
O di $5
Question 3
Dividend payments on common stock are guaranteed.
O a) True
O b) False

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