Question

Helena corporation declared a 2-for-1 stock split on 8,000 shares of $6 par value common stock. if the market price of the stock had been $25 a share before the split, the par value, number of shares, and approximate market value after the split would be:

Answer 1

In a 2 for 1 stock split, par value and market value will be 1/2 of what they were prior to the split and number of shares will be two times what it was.

So,

par value will be 6 x 0.5 = $ 3.00

market value will be 25 x 0.5 = $ 12.50

number of shares 8,000 x 2 will be 16,000 shares