Magnum Corporation had 60,000 of its $3 par common stock issued before its recent 3-for-1 stock split. The market price of the stock was $30 per share before the split. Which of the following is true as a result of the split?

Question

Quizplus · Accepted Answer

In a 3-for-1 stock split, the number of shares increases threefold, and the par value per share decreases proportionally. Therefore, the par value decreases from $3 to $1 per share.

Magnum Corporation Had 60,000 of Its $3 Par Common Stock