Sunshine Corp. announced a 2-for-1 stock split of its common stock, which currently is selling for $10 per share. Currently, 200,000 shares of stock are outstanding. What should be the market price per share of the stock immediately after the split is initiated?

Question

Quizplus · Accepted Answer

In a 2-for-1 stock split, the number of outstanding shares doubles and the stock price is halved. Therefore, after the split, there will be 400,000 outstanding shares, and the price per share will be $5 ($10/2). Hence, the correct answer is C.