The stock in your portfolio was selling for $40 per share yesterday, but has today declared a three for two stock split.Which of the following statements seems to be true?

Question

Quizplus · Accepted Answer

A three for two stock split means that for every two shares owned, the stockholder will receive an additional share. Therefore, the number of shares outstanding will increase by 50%. However, the price per share will decrease proportionally. 
To find the new price per share, divide the old price per share by the split ratio (in this case, 3/2): 
$40 ÷ (3/2) = $26.67 
So, the correct statement is: There will be 50% more shares outstanding, and they will sell for $26.67 each.

The Stock in Your Portfolio Was Selling for $40 Per