A corporation has 50,000 shares of $25 par value stock outstanding that has a cu

Question

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately: a. $150 b. $30 c. $5 d. $25 A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately: a. $150 b. $30 c. $5 d. $25

Explanation / Answer

Hi,

Please find the answer as follows:

Market Value of the Stock after the Split = Current Market Value/Number of Shares after Stock Split = 150/5 = 30

Option B (30) is the correct answer.

Thanks.

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