Whited Products recently completed a 4-for-1 stock split.Prior to the split,its stock sold for $75 per share.If the firm's total market value increased by 6% as a result of increased liquidity and favorable signaling effects,what was the stock price following the split?
A) $19.28
B) $16.10
C) $16.89
D) $19.88
E) $21.86

Question

Quizplus · Accepted Answer

11ea856c_8b77_d5d0_9aec_7b3220c13462_TB1222_00 Post-split stock price = [(P₀ / New shares per old shares)× (1 + % Value increase)] = $19.88

Whited Products Recently Completed a 4-For-1 Stock Split