Before a four-for-one stock split, the shares outstanding were 7,000 shares at $12 par. After the split, what was the par value per share and number of shares? (Round your answer to the nearest cent.)

Question

Quizplus · Accepted Answer

In a four-for-one stock split, each original share is divided into four shares, thus quadrupling the number of shares. The new par value per share is the original par value divided by four. Therefore, the new number of shares is 7,000 * 4 = 28,000, and the new par value per share is $12 / 4 = $3.00.

Before a Four-For-One Stock Split, the Shares Outstanding Were 7,000