The owners\' equity accounts for Alexander International are shown here. The own

Question

The owners' equity accounts for Alexander International are shown here.

The owners' equity accounts for Alexander International are shown here. If Alexander declares a two-for-one stock split, how many shares are outstanding now? What is the new par value per share? (Round your answer to 3 decimal places, (e.g., 32.161)) If Alexander declares a one-for-five reverse stock split, how many shares are outstanding now? What is the new par value per share? (Round your answer to 2 decimal places, (e.g., 32.16))

Explanation / Answer

Two for one stock Split:

Answer: a-1:

Current outstanding number of shares = Common Stock Value / Par value per share = 27500 / 0.40 = 68750 Shares

New outstanding number of shares (After Split) = 68750 *2 = 137500 Shares

Answer-a-2:

New par value per share = old Par value per share / 2 = 0.40 /2 = $0.20 Per share

One for Five reverse stock Split:

Answer-b-1:

Current outstanding number of shares = Common Stock Value / Par value per share = 27500 / 0.40 = 68750 Shares

New outstanding number of shares (After Split) = 68750 /5 = 13750 Shares

Answer-b-2:

New par value per share = old Par value per share / 2 = 0.40*5 = $ 2 Per share

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