On May 1,20x5,Ironwood Corporation had 200,000 shares of $10 par value common stock outstanding with a market value of $16 per share.On May 2,20x5,Ironwood announced a 4-for-1 stock split.After the split,the par value of the stock

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After the 4-for-1 stock split, the number of outstanding shares will increase to 800,000 (200,000 x 4). The total par value of the outstanding shares will remain the same at $2,000,000 (200,000 x $10). Therefore, the par value per share will be reduced to $2.50 ($2,000,000 ÷ 800,000), making choice B the correct answer.

On May 1,20x5,Ironwood Corporation Had 200,000 Shares of $10 Par