Dillon Corporation splits its ordinary shares 2 for 1, when the market value is $40 per share. Prior to the split, Dillon had 50,000 ordinary shares with a $20 par value issued and outstanding. After the split, the par value of the shares

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When a company splits its shares, the total par value remains the same, but the par value per share is reduced. In this case, since Dillon Corporation split its shares 2 for 1, the number of outstanding shares doubled to 100,000, but the total par value remained at $1,000,000 (50,000 shares x $20 par value). Therefore, the par value per share was reduced to $10 ($1,000,000 total par value / 100,000 shares outstanding after split).

Dillon Corporation Splits Its Ordinary Shares 2 for 1, When