AFB,Inc.stock is currently selling for $20 per share.The company completed a 5-for-1 stock split two days earlier.Two years ago,the company had a 2-for-1 stock split.If the stock splits had not happened,the price of AFB,Inc.stock would,other things being equal,be
A) $140.00 per share.
B) $200.00 per share.
C) $100.00 per share.
D) $2.00 per share.

Question

Quizplus · Accepted Answer

Before the 5-for-1 stock split, the price would have been 5 times the current price ($20 * 5 = $100). Before the earlier 2-for-1 stock split, the price would have been 2 times that adjusted price ($100 * 2 = $200). Therefore, without the splits, the stock would be $200 per share.

AFB,IncStock Is Currently Selling for $20 Per Share