The Peace River Corporation has 52,000 shares of stock outstanding at a market price of $41 a share. The company has just announced a stock split of five-for-three. How many shares of stock will be outstanding after the split?

Question

Quizplus · Accepted Answer

A five-for-three stock split means that for every three shares of stock, the shareholder will receive five new shares. Therefore, the number of shares outstanding will increase by a factor of 5/3.

After the split, the new number of shares outstanding will be:
52,000 x (5/3) = 86,667 shares

Therefore, the correct answer is D) 86,667 shares.

The Peace River Corporation Has 52,000 Shares of Stock Outstanding