A corporation has 50,000 shares of $28 par stock outstanding that has a current market value of $150 per share. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately

Question

Quizplus · Accepted Answer

After a 4-for-1 stock split, each share is divided into 4, so the market value per share is divided by 4 as well. Therefore, the new market value is $150 / 4 = $37.50.

A Corporation Has 50,000 Shares of $28 Par Stock Outstanding