Sunshine Corp. announces a 2-for-1 stock split for its shares trading at $100. If the current number of shares outstanding is 200,000, then the new market price of the share will be _____.

Question

Quizplus · Accepted Answer

A 2-for-1 stock split means that the number of outstanding shares will double while the price per share will be halved. Therefore, after the split, there will be 400,000 shares outstanding, and the new market price per share will be $50 ($100/2).