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Marcos Company, which had 25,000 shares of common stock outstanding, declared a 4 for 1 stock...

Marcos Company, which had 25,000 shares of common stock outstanding, declared a 4 for 1 stock split.

Do not use $; however, use any required commas.

If the stock had a $100 pare value before the split, ________________ would be the par value after the split.

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Answer #1

Answer $25 would be the par value after the split.

In case of a stock split, total par value of stock remains same. It is the Par Value per share that will change to reflect stock split.

So, Total Par Value of 25,000 shares @ $100 par is $2,500,000.

Stock split is 4 for 1 meaning for every 1 share, 4 shares will be issued.

For 25,000 shares, 100,000 shares will be issued. (25,000*4)

As after stock split, Total Par Value remains same @ $2,500,000,

New par value per share = 2,500,000/ 100,000 = $25 par value per share.

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