Ramon's has 21,000 shares of stock outstanding with a par value of $1.00 per share and a market price of $27 a share. The ﬁrm just announced a 5-for-3 stock split. How many shares of stock will be
Outstanding after the split?

Question

Quizplus · Accepted Answer

A 5-for-3 stock split means for every 3 shares, shareholders will now have 5 shares. Thus, the number of shares will increase by a factor of 5/3. Therefore, 21,000 shares * (5/3) = 35,000 shares.

Ramon's Has 21,000 Shares of Stock Outstanding with a Par