First National Bank Inc.has decided on a 5-for-1 stock split.If the firm currently has 2,000,000 shares outstanding,how many shares will be outstanding after the stock split?

Question

Quizplus · Accepted Answer

A 5-for-1 stock split means that for every 1 share held by an investor, they will receive 5 new shares. Therefore, if the firm currently has 2,000,000 shares outstanding and implements the 5-for-1 stock split, the number of shares outstanding will increase by a factor of 5, resulting in a total of 10,000,000 shares outstanding.