Saskatchewan Corp.is considering a 15-for-3 stock split.The current stock price is $86.00 per share,and the firm believes that its total market value would increase by 2% as a result of the improved liquidity that it thinks would follow the split.What is the stock's expected price following the split?

Question

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After a 15-for-3 stock split, each share is divided into 5 shares (15/3 = 5). The new price per share would be $86.00 / 5 = $17.20. However, since the total market value is expected to increase by 2%, the new price per share would be $17.20 * 1.02 = $17.54.