Philip's Garage has 25,000 shares of stock outstanding with a market price of $47 per share. The balance sheet shows $211,500 in the common stock account and $211,400 in the retained earnings account. The firm just announced a 5-for-3 stock split. How many shares of stock will be outstanding after the split?

Question

Quizplus · Accepted Answer

A 5-for-3 stock split means that for every 3 shares currently held, shareholders will receive 5 shares. Therefore, the number of shares after the split will be (25,000 shares * 5/3) = 41,667 shares.

Philip's Garage Has 25,000 Shares of Stock Outstanding with a Market