An investor owns 300 shares of stock currently selling for $70 per share.What should the investor expect to have after the stock declares a three-for-two split?

Question

Quizplus · Accepted Answer

A three-for-two stock split means that for every two shares the investor currently owns, they will receive three more shares. Therefore, the investor's 300 shares will become 450 shares after the split. However, the price per share will decrease proportionally. So, the new price per share will be $70/1.5 = $46.67. Therefore, the investor should expect to have 450 shares selling for $46.67 each after the split.

An Investor Owns 300 Shares of Stock Currently Selling for $70