On May 10, Mr. Evans has 100 shares of Kimpo Corporation. Kimpo Corporation has
ID: 2531365 • Letter: O
Question
On May 10, Mr. Evans has 100 shares of Kimpo Corporation. Kimpo Corporation has 10,000 shares outstanding. The total equity of the company is 1,670,000. The market price of the stock on May 10 is $250 per share. A) What is the book value per share? $ B) What is the total book value of Mr. Evans 100 shares? $ C) What is the market value of Mr. Evans shares? $ On June 5, the company declares a 2 for 1 stock split. After the stock split on June 5, the market price of the stock is $130 per share. D) What is the book value per share on June 5? $ E) How many shares does Mr. Evans have on June 5? F) What is the total book value of Mr. Evans shares on June 5? $ G) What is the market value of Mr. Evans shares on June 5? $
Explanation / Answer
Mr. Evans has 100 shares of Kimpo Corporation.
Kimpo Corporation has 10,000 shares outstanding. The total equity of the company is 1,670,000. The market price of the stock on May 10 is $250 per share.
A) What is the book value per share?
Book Value per share
= Total Equity / Total Outstanding Shares
= 1,670,000 / 10,000
= 167
B)What is the total book value of Mr. Evans 100 shares?
Total Book value of Mr Evans 100 shares = 167 * 100 = 16,700
C) What is the market value of Mr. Evans shares?
Market value of Mr. Evans shares = 100 * 250 = 25,000
D) What is the book value per share on June 5?
Book value per share on June 5 = Old Book value * 1/2
= 167 * 1/2 = 83.50
E) How many shares does Mr. Evans have on June 5?
No of Shares that Mr Evans have on June 5 = Shares held prior to Split * 2
= 100 * 2 = 200
F) What is the total book value of Mr. Evans shares on June 5?
Total book value of Mr. Evans shares on June 5 = 83.50 * 200 = 16,700
G) What is the market value of Mr. Evans shares on June 5?
Market value of Mr. Evans shares on June 5 = Market price post stock split * No of shares held
= 130 * 200
= 26,000
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