Question

A company declared a 5 for 3 stock split when the stock was selling at $250...

A company declared a 5 for 3 stock split when the stock was selling at $250 per share. Prior to the split, the firm had $50 million in common stock with a $6 par. Which of the following answers would be correct after the split?

Common stock = $83.35 mil

Stock price = $417

Par value = $3.60

Stock price = $150

Common Stock = $30 mil

Stock price = $150

Par value = $10

Stock price = $41.70
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The share split refers to a scenario when the company increases the number of shares in order to decrease the price per share.

Share Price after Stock Split = Share Price Before stock split * ( Number of share per lot before Stock split / Number of share per lot after stock split)

= 250 * ( 5 / (5+3))

= 250 * (5/8)

= $150

Total Number of shares =  Number of share before split * ( Number of share per lot before Stock split / Number of share per lot after stock split)

= 50 * (( 5 / (5+3))

= 50 * (5/8)

= 83.5 Millions

Face Value = Face value per share before split * ( Number of share per lot before Stock split / Number of share per lot after stock split)

= 6 * (( 5 / (5+3))

= 3.75 Per share

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on...
On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 150 million, $1 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $28 on June 13. Prepare the journal entry to record the stock split if it is not to be effected in the form of a stock dividend. What is the par per share after the split?
A corporation, which had 24,100 shares of common stock outstanding, declared a 4-for-1 stock split. a....
A corporation, which had 24,100 shares of common stock outstanding, declared a 4-for-1 stock split. a. What will be the number of shares outstanding after the split? shares b. If the common stock had a market price of $88 per share before the stock split, what would be an approximate market price per share after the split? $ per share c. Journalize the entry to record the stock split. If no entry is required, type "No Entry" and leave the...
ABC's capital structure is as follows: Common Stock ($4 par) $90 mil Paid-in capital in excess...
ABC's capital structure is as follows: Common Stock ($4 par) $90 mil Paid-in capital in excess 300 mil Retained Earnings 700 mil Currently, the stock is selling at $260. If the firm does a 5 for 1 split, which of the following would be correct after the split? Par value = $20 Number of shares = 112.5 mil Stock price = $52 Par Value = $.80 Number of shares = 112.5 mil Stock price = $52 Par value = $.80...
On July 1, Davidson Corporation had the following capital structure:      Common stock ( $4 par...
On July 1, Davidson Corporation had the following capital structure:      Common stock ( $4 par value) $ 696,000   Additional paid-in capital 1,060,000   Retained earnings 890,000   Treasury stock   0 Required: Complete the table below for each of the two following independent cases: (Round "Par value per share" answers to 2 decimal places.) Case 1: The board of directors declared and issued a 50 percent stock dividend when the stock was selling at $6 per share. Case 2: The board of...
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.
On August 10, 2014, Geller, Inc.’s board of directors declared a 3-for-1 stock split of its...
On August 10, 2014, Geller, Inc.’s board of directors declared a 3-for-1 stock split of its $9 par value common stock, of which 400,000 shares were authorized and 125,000 were issued and outstanding. The market value on that date was $60 per share. On the same date, the balance of additional paid-in capital was $3,000,000, and the balance of retained earnings was $3,250,000. Prepare the stockholders’ equity section of the company’s balance sheet after the stock split. What entry, if...
The company with the common equity accounts shown here has declared a four-for-one stock split when...
The company with the common equity accounts shown here has declared a four-for-one stock split when the market value of its stock is $61 per share. The firm’s 75-cent per share cash dividend on the new (postsplit) shares represents an increase of 10 percent over last year’s dividend on the presplit stock. what effect does this have on the equity accounts? what was last year's dividend per share? common stock ($1 per value) : 275000 capital surplus : 763000 retained...
A corporation, which had 12,000 shares of common stock outstandingdeclared a 6-for-1 stock split. What will...
A corporation, which had 12,000 shares of common stock outstandingdeclared a 6-for-1 stock split. What will be the number of shares outstanding after the split? ) If the common stock had a market price of $240 per share before the stock split, what would be an approximate market price per share after the split?
Kinmi Financial Corporation is the parent company of Kinmi Bank. The company’s stock split was announced...
Kinmi Financial Corporation is the parent company of Kinmi Bank. The company’s stock split was announced in the following wire: LOS ANGELES (BUSINESS WIRE) Jan. 20—Kinmi Financial Corporation (Nasdaq), announced that the Board of Directors has approved a two-for-one stock split, to be effected in the form of a 100 percent common stock dividend. Kinmi Financial Corporation stockholders of record at the close of business on January 31 will receive one additional share of common stock for every share of...
Kinmi Financial Corporation is the parent company of Kinmi Bank. The company’s stock split was announced...
Kinmi Financial Corporation is the parent company of Kinmi Bank. The company’s stock split was announced in the following wire: LOS ANGELES Jan. 20 BUSINESS WIRE—Kinmi Financial Corporation (Nasdaq), announced that the Board of Directors has approved a two-for-one stock split, to be effected in the form of a 100 percent common stock dividend. Kinmi Financial Corporation stockholders of record at the close of business on January 31 will receive one additional share of common stock for every share of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT