Question

stock of choco company is trading at $50 per share. number of the common shares outstanding in the company is 2,000,000. what is the share price after five-for-three stock split? (a) $50.00 (b) $83.33 (c) $30.00 (d) $16.67

Answer 1

If stock of choco company is trading at $50 per share. The share price after the five-for-three stock split is: C. $30.

What is the share price?

New number of shares outstanding:

New number of shares after the split:

2,000,000 * (5/3)

= 3,333,333.33 (rounded to the nearest whole number)

New share price:

New share price after the split:

= $50 / (5/3)

= $50 * (3/5)

= $30

Therefore, the share price after the five-for-three stock split is $30.