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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Mid-State BankCorp recently declared a 7-for-2 stock split. Prior to the split, the stock sold for $100 per share. If the firm's total market value is unchanged by the split, what will be the stock price following the split?
Expert Solution
Step 1
Introduction:
Stock split is nothing but dividing the existing shares of the company into multiple shares with a view to increase liquidity. stock splits are also done by companies with a view to make the prices more attractive. However the total value of the shares would remain the same irrespective of the split.
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