The owners\' equlity accounts for Freya International are shown here. ommon stoc
ID: 2799225 • Letter: T
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The owners' equlity accounts for Freya International are shown here. ommon stock (S.40 par value) Capital surplus Retained eamings S 44,000 788,120 s 1,192,120 Total owners' equity a-1 If Freya declares a two-for-one stock split, how many shares are outstanding now? (Do not round intermediate calculations.) New shares outstanding a-2 What is the new par value per share? (Do not round intermediate calculations. Round your answer to 3 decimal places, e.g., 32.161.) New par value per share b-1 If Freya declares a one-for-four reverse stock split, how many shares are outstanding now? (Do not round intermediate calculations.) b-2 What is the new par value per share? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) New par value er shareExplanation / Answer
Given common stock
44000
Value per share
40
No of share oustanding before stock split
1100
a -1
If freya declare a two for a one stock split, the shares outstanding will be
No shares in split
=(1100*2)/1
2200
a- 2
New par value per share will be
=common stock value / no of shares after stock split
=44000/2200
20
b - 1
If freya declare a one for four reverse stock split, the shares outstanding will be
No of shares after reverse stock split
275
b -2
New par value per share will be
=common stock value / no of shares after reverse stock split
=44000/275
160
Given common stock
44000
Value per share
40
No of share oustanding before stock split
1100
a -1
If freya declare a two for a one stock split, the shares outstanding will be
No shares in split
=(1100*2)/1
2200
a- 2
New par value per share will be
=common stock value / no of shares after stock split
=44000/2200
20
b - 1
If freya declare a one for four reverse stock split, the shares outstanding will be
No of shares after reverse stock split
275
b -2
New par value per share will be
=common stock value / no of shares after reverse stock split
=44000/275
160
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