Robinson's has 15,000 shares outstanding with a par value of £1.00 per share and a market price of £36 a share.The statement of financial position shows £15,000 in the ordinary equity account,£315,000 in the additional paid in capital account,and £189,000 in the retained earnings account.The firm just announced a 3-for-2 stock split.How many shares will be outstanding after the split?

Question

Quizplus · Accepted Answer

A 3-for-2 stock split means that for every 2 shares owned by a shareholder, they will receive an additional share.

Initially, Robinson's had 15,000 shares outstanding. After the split, each shareholder will have 3/2 the number of shares they previously owned.

So, the new number of outstanding shares will be:
15,000 * (3/2) = 22,500

Therefore, the answer is D) 22,500 shares.

Robinson's Has 15,000 Shares Outstanding with a Par Value of £1.00