A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 5-for-1 stock split, the number of shares outstanding after the split will be 2,000.

Question

Quizplus · Accepted Answer

A 5-for-1 stock split means that each share is split into 5 new shares. Therefore, the total number of shares outstanding will increase by a factor of 5, not decrease. After the stock split, there will be 50,000 shares outstanding, not 2,000.

A Corporation Has 10,000 Shares of $100 Par Value Stock