Peterson Paper Products Inc. has 2,400,000 outstanding shares of stock selling for $52 per share. After a 2-for-1 stock split, how many shares of stock are outstanding and what is the change in the firm value (given no new information)?
A) 4,800,000 shares and a change in value of $124,800,000
B) 4,800,000 shares and a change in value of $0.00
C) 1,200,000 shares and a change in value of $124,800,000
D) 1,200,000 shares and a change in value of $0.00
Answer: B
Explanation: B) A 2-for-1 stock split = 2 × 2,400,000 shares = 4,800,000 shares. A stock split in and of itself has no value. However, the split may send a signal to the market of positive expectations for the firm.
You might also like to view...
A mathematical distribution whose objective is to obtain a count of the number of responses associated with different values of one variable as to express these counts in percentage terms is called frequency distribution
Indicate whether the statement is true or false
Companies can pay more to men than women for the same job based on ________, ________ and/or ________
Fill in the blanks with correct word