On December 10, Daniel Co. split its stock 5-for-2 when the market value was $65 per share. Prior to the split, Daniel had 200,000 shares of $15 par value stock. After the split, the par value of the stock was

Question

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Before the split, Daniel Co. had 200,000 shares of $15 par value stock, meaning the total par value of their outstanding stock was:

200,000 shares * $15 par value = $3,000,000

After the split, each share was split into 5/2=2.5 shares. Therefore, the number of outstanding shares increased by a factor of 2.5:

200,000 shares * 2.5 = 500,000 shares

However, the total par value of the outstanding stock remained the same:

$3,000,000 / 500,000 shares = $6 par value per share

Therefore, the answer is B, $6.