A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $120. If the corporation issues a 5-for-1 stock split, the par value of the stock after the split will be:

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A 5-for-1 stock split means that for every 1 share that a shareholder owns, they will receive an additional 4 shares (5 total). After the stock split, there will be 250,000 shares outstanding (50,000 x 5). The total par value of the stock will remain the same at $1.25 million (50,000 shares x $25 par value), but the par value per share will be divided by 5, making it $5 per share.

A Corporation Has 50,000 Shares of $25 Par Value Stock