Robinson's has 15,000 shares of stock outstanding with a par value of $1.00 per share and a market price of $36 a share. The balance sheet shows $15,000 in the common stock account,$315,000 in the capital in excess of par account,and $189,000 in the retained earnings account. The firm just announced a 3-for-2 stock split. How many shares of stock will be outstanding after the split?

Question

Quizplus · Accepted Answer

A 3-for-2 stock split means that for every two shares owned, shareholders will receive an additional three shares.

So, for Robinson's, the number of shares outstanding will be:

15,000 x (3/2) = 22,500

Therefore, after the split, there will be 22,500 shares outstanding.

Robinson's Has 15,000 Shares of Stock Outstanding with a Par