On January 1,Year 1 you bought 100 shares of Oscorp Inc.It is now January 1 of Year 2.You have recorded stock price information for Oscorp in the table,below.You want to calculate your return on the investment.After digging through your records you realize that Oscorp executed a 3-for-2 stock split late in Year 1.Use this information to adjust the data in the table and calculate the split-adjusted annual return on the investment in Cyberdyne shares.
Selected Financial Data
Oscorp Inc.

Question

Quizplus · Accepted Answer

The price after a split is given by: P_A = 11ea7fdb_fc57_342f_a768_578da85eb3de_TB2902_11 Where P_B = the price before S = the split ratio In this example, S = 1.5 (a 3-for-2 split), so we can adjust the stock price in Year 2 to see what they would have been had the split not happened. P₂ = $8 × 1.5 = $12 The split-adjusted return is: k₁ = 11ea7fdb_fc57_5b40_a768_559241405ea7_TB2902_11 = 0

On January 1,Year 1 You Bought 100 Shares of Oscorp