The stockholders' equity section of the balance sheet of the XYZ Corp. is as follows: Common stock ($6 par) $ 24,000,000 Retained earnings $ 125,000,000 Total $ 149,000,000 If the company now splits its stock 3-for-1, which of the following is correct? A. The book value per share will decline to $17.60. B. The par value per share will remain at $6. C. The par value per share will decline to $2.00. D. The market price per share will probably remain unchanged.
The stockholders' equity section of the balance sheet of the XYZ Corp. is as follows: Common stock ($6 par) $ 24,000,000 Retained earnings $ 125,000,000 Total $ 149,000,000 If the company now splits its stock 3-for-1, which of the following is correct? A. The book value per share will decline to $17.60. B. The par value per share will remain at $6. C. The par value per share will decline to $2.00. D. The market price per share will probably remain unchanged.
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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The
| Common stock ($6 par) | $ | 24,000,000 | |
| $ | 125,000,000 | ||
| Total | $ | 149,000,000 | |
If the company now splits its stock 3-for-1, which of the following is correct?
A. The book value per share will decline to $17.60.
B. The par value per share will remain at $6.
C. The par value per share will decline to $2.00.
D. The market price per share will probably remain unchanged.
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