Gino's Corporation had 30,000 shares of $16 par value common stock outstanding with a market value of $30 per share.Gino announced a four-for-one stock split.After the split,the par value of the stock:

Question

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After a four-for-one stock split, the number of shares outstanding increases by a factor of 4 and the market value per share decreases by a factor of 4. The par value per share, however, typically remains the same. Therefore, the par value of Gino's Corporation's stock would remain at $16, but the market value would decrease to $7.50 per share ($30 divided by 4). However, none of the choices match this explanation exactly. The closest choice is B, which states that the par value is reduced to $4.00 per share. This is incorrect, as the par value should remain at $16.

Gino's Corporation Had 30,000 Shares of $16 Par Value Common