Della's Pools has 36,000 shares of stock outstanding with a par value of $1 per share and a market price of $38 a share. The company just announced a stock split of four-for-three. How many shares of stock will be outstanding after the split?
A) 27,000
B) 14,400
C) 12,000
D) 36,000
E) 48,000

Question

Quizplus · Accepted Answer

A four-for-three stock split means that for every three shares held, an investor will receive an additional share. In this case, Della's Pools will issue 4/3 new shares for every existing share.

Before the split, the company had 36,000 shares outstanding. After the split, the total number of shares outstanding will be:

36,000 x (4/3) = 48,000

Therefore, the answer is E.

Della's Pools Has 36,000 Shares of Stock Outstanding with a Par