Determining Effects of Stock Splits Oracle Corp has had the following stock spli

Question

Determining Effects of Stock Splits
Oracle Corp has had the following stock splits since its inception.

a. If the par value of Oracle shares was originally $2, what would Oracle Corp. report as par value per share on its 2015 balance sheet?

Compute the revised par value after each stock split.
Round answers to three decimal places.

b. On May 10, 2016, Oracle stock traded for about $60. All things equal, if Oracle had never had a stock split, what would a share of Oracle have traded for that same day?
Round answer to the nearest dollar.
$Answer

Effective Date Split Amount October 12, 2000 2 for 1 January 18, 2000 2 for 1 February 26, 1999 3 for 2 August 15, 1997 3 for 2 April 16, 1996 3 for 2 February 22, 1995 3 for 2 November 8, 1993 2 for 1 June 16,1989 2 for 1 December 21, 1987 2 for 1 March 9, 1987 2 for 1

Explanation / Answer

a Effective Date Split Amount Par Value Original NA $          2.000 March 9, 1987 2 for 1 $          1.000 2/2 December 21, 1987 2 for 1 $          0.500 1/2 June 16,1989 2 for 1 $          0.250 0.5/2 November 8, 1993 2 for 1 $          0.125 0.25/2 February 22, 1995 3 for 2 $          0.083 0.125*2/3 April 16, 1996 3 for 2 $          0.056 0.083*2/3 August 15, 1997 3 for 2 $          0.037 0.056*2/3 February 26, 1999 3 for 2 $          0.025 0.037*2/3 January 18, 2000 2 for 1 $          0.012 0.025/2 October 12, 2000 2 for 1 $          0.006 0.012/2 b Market to book ratio = 10000 =60/0.006 So for original share of $2 = 2 x 10000 = $        20,000

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