Gino's Corporation had 20,000 shares of $15 par value common stock outstanding with a market value of $40 per share.Gino announced a four-for-one stock split.After the split,the par value of the stock:

Question

Quizplus · Accepted Answer

After a four-for-one stock split, the number of shares increases four-fold and the par value decreases proportionately. In this case, the number of shares will increase from 20,000 to 80,000 (4 x 20,000). The par value will decrease from $15 to $3.75 ($15 ÷ 4), hence the answer is B.

Gino's Corporation Had 20,000 Shares of $15 Par Value Common