The Tinslow Co. has 125,000 shares of stock outstanding at a market price of $93 a share. The company has 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 of stock, shareholders will receive an additional 2 shares, thus increasing the total number of shares by 5/3 or 1.67 times the original amount. So, after the stock split, the number of outstanding shares would be: 125,000 x 1.67 = 208,333 shares. Therefore, the correct answer is E.