Toombs Media Corp.recently completed a 3-for-1 stock split.Prior to the split,its stock sold for $150 per share.The firm's total market value was unchanged by the split.Other things held constant,what is the best estimate of the stock's post-split price?
A)$50.00
B)$52.50
C)$55.13
D)$57.88

Question

Quizplus · Accepted Answer

In a 3-for-1 stock split, each share is divided into 3 shares, so the price per share would be divided by 3. Therefore, if the pre-split price was $150, the post-split price would be $150 / 3 = $50.00.