Larabee Inc. has 870,000 shares outstanding that sell for $96 per share. What will the stock price and shares outstanding be after a three-for-one split?

Question

Larabee Inc. has 870,000 shares outstanding that sell for $96 per share.   What will the stock price and shares outstanding be after a three-for-one split? ​

Quizplus · Accepted Answer

After a three-for-one stock split, the number of shares will triple, and the price per share will be divided by three. Therefore, the new number of shares will be 870,000 * 3 = 2.61 million shares, and the new stock price will be $96 / 3 = $32.