On November 10,Linden Co.split its stock 5-for-2 when the market value was $55 per share.Prior to the split,Linden had 300,000 shares of $15 par value stock.After the split,the par value of the stock was

Question

Quizplus · Accepted Answer

A 5-for-2 stock split means that for every 2 shares of stock owned before the split, the shareholder would receive 5 shares after the split. Therefore, if Linden Co. had 300,000 shares of stock before the split, the total number of shares after the split would be:
300,000 x (5/2) = 750,000 shares

Since the par value of the stock is split proportionally to the number of shares, the new par value per share would be:
$15 / (5/2) = $6

Therefore, the correct answer is B) $6.