SesameSweet Inc. has 220,000 shares outstanding with a market price of $12 per share. On the balance sheet, common stock is $760,000, and retained earnings are $275,000. There are no transactions costs.

Suppose SesameSweet declares a 3-for-1 stock split. If you owned 750 shares before the split, how many do you own after the split?

Question

SesameSweet Inc. has 220,000 shares outstanding with a market price of $12 per share. On the balance sheet, common stock is $760,000, and retained earnings are $275,000. There are no transactions costs.

Suppose SesameSweet declares a 3-for-1 stock split. If you owned 750 shares before the split, how many do you own after the split?

Quizplus · Accepted Answer

The Answer of SesameSweet Inc. has 220,000 shares outstanding with a market price of $12 per share. On the balance sheet, common stock is $760,000, and retained earnings are $275,000. There are no transactions costs.

Suppose SesameSweet declares a 3-for-1 stock split. If you owned 750 shares before the split, how many do you own after the split?