Use the following information to answer the following question(s).
Your firm is planning a 2 for 1 share split.The market price for the share has been $84.The following table presents the equity portion of your firm's balance sheet before the split.
Common share

-Immediately after the share split, the share price will be approximately [blank].
A)$42
B)$84
C)$2.00
D)$8.00

Question

Use the following information to answer the following question(s).
Your firm is planning a 2 for 1 share split.The market price for the share has been $84.The following table presents the equity portion of your firm's balance sheet before the split.
Common share
 
-Immediately after the share split, the share price will be approximately [blank].
A)$42 
B)$84 
C)$2.00 
D)$8.00

Quizplus · Accepted Answer

In a 2 for 1 share split, the number of outstanding shares doubles and the market price per share is halved. Therefore, the market price for the share after the split will be approximately $42.

Use the Following Information to Answer the Following Question(s)