Question

A corporation has 50,000 shares of $28 par stock outstanding that has a current market value...

A corporation has 50,000 shares of $28 par stock outstanding that has a current market value of $150 per share. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately

a.$112.00

b.$37.50

c.$600.00

d.$7.00

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Answer #1

Your required answer is option B i.e. $37.50

Explanation:

Stock split is the situation when a company issue shares to it's existing shareholders. In this question company is issuing 4 shares for every 1 shares.

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