The Baxter Company has 30,000 shares of $3 par common stock outstanding. The com
ID: 2557484 • Letter: T
Question
The Baxter Company has 30,000 shares of $3 par common stock outstanding. The company’s board of directors declares a 3-for-1 stock split when the market price is $9 per share. Which of the following statements are correct? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)
After the stock split, the company will have 10,000 shares, each with an approximate market value of $9.unchecked
After the stock split, the company will have 90,000 shares, each with an approximate market value of $3.unchecked
The par amount of the shares becomes $1 per share.unchecked
No journal entry is recorded.unchecked
Explanation / Answer
After the stock split, the company will have 90,000 shares, each with an approximate market value of $3 The par amount of the shares becomes $1 per share. No journal entry is recorded.
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