Albany Motors recently completed a 3-for-1 stock split. Prior to the split, the company had 10 million shares outstanding and its stock price was $150 per share. After the split, the total market value of the company's stock equaled $1.5 billion. What was the price of the company's stock following the stock split?
A) $ 15
B) $ 45
C) $ 50
D) $150
E) $450

Question

Quizplus · Accepted Answer

After the 3-for-1 stock split, the number of shares outstanding increased to 30 million (10 million x 3). The total market value of the company's stock remains the same at $1.5 billion. Therefore, the price of the company's stock following the split would be $50 per share ($1.5 billion/30 million shares).

Albany Motors Recently Completed a 3-For-1 Stock Split