Robinson's has 15,000 shares outstanding with a par value of £1.00 per share and a market price of £36 a share.The statement of ﬁnancial position shows £15,000 in the ordinary equity account,
£315,000 in the additional paid in capital account, and £189,000 in the retained earnings account.
The ﬁrm just announced a 3-for-2 stock split.How many shares will be outstanding after the split?

Question

Quizplus · Accepted Answer

A 3-for-2 stock split means that for every two shares held by a shareholder, they will receive three additional shares.

There are currently 15,000 shares outstanding.

After the stock split, for every two shares held, shareholders will receive three additional shares.

So, the total number of shares outstanding will be:

15,000 x (3/2)

= 22,500 shares

Therefore, the correct answer is D.

Robinson's Has 15,000 Shares Outstanding with a Par Value of £1.00