Immediately after the stock split, an investor who owned 100 share before the split will own
Your firm is planning a 2 for 1 stock split. The market price for the stock has been $84. The table below presents the equity portion of your firm's balance sheet before the split.
Common stock
Par value
(1 million shares
outstanding; $4 par value) $ 4,000,000
Paid-in capital 16,000,000
Retained earnings 30,000,000
Total equity $50,000,000
A) 100 shares worth a total of $4200.
B) 200 shares worth a total of $8400.
C) 200 shares worth a total of $16,800.
D) 200 shares with a par value of $8.00 each.
Answer: B
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