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Impact of stock split on its value

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A corporation has 17,000 shares $50 par value common stock. The Board of directors declares a 4-for-1 stock split when the market value of the stock is $187.

a. What will be the number of shares outstanding after the stock split?
b. What will be the par value of the shares after the stock split?
c. What should be the approximate value of the stock after the stock split?

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The solution shows impact of stock split on number of stock outstanding, par value and market value.

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a. What will be the number of shares outstanding after the stock split?

Number of shares outstanding ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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