Whited Products recently completed a 4-for-1 stock split.Prior to the split,its stock sold for $120 per share.If the firm's total market value increased by 5% as a result of increased liquidity caused by the split,what was the stock price following the split?
A)$24.00
B)$30.00
C)$31.50
D)$33.50

Question

Quizplus · Accepted Answer

After the 4-for-1 stock split, the original share would be divided into 4 shares, making the price per share $120 / 4 = $30. With a 5% increase in total market value due to the split, the new price per share would be $30 * 1.05 = $31.50.

Whited Products Recently Completed a 4-For-1 Stock Split