Assume you own 250 shares of Widget Extreme selling at $67.00 per share. In orde

Question

Assume you own 250 shares of Widget Extreme selling at $67.00 per share. In order to make the stock more affordable for the average investor, Widget Extreme's management has decided to split the stock. Answer the following questions:

A) How much was your investment worth prior to the split?

B) Assuming Widget's Extrmeme's management decides to split the stock two for one, how many shares would you own after the split?

C) What is the new price per share immediately after the split?

D) How much would your investment be worth after the two-for-one-split?

Explanation / Answer

(A) Value of investment before split =$16750($67*250shares) (B)No of Shares after split= 500(250*2) (C)New price per share after split= $33.5($67/2) (D)Value of investment after split=$16750($33.5*500) Value of investment will not be affected by the split.

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