Explanation:
Before the 3-for-2 split, Katelyn owns 140 shares of the stock that sells for $39 a share.
In a 3-for-2 split, each share is replaced with 1.5 new shares. This means that Katelyn's 140 shares will be replaced with 140 x 1.5 = 210 new shares.
To determine the new stock price after the split, we need to divide the old stock price by the split ratio (3/2):
New stock price = $39 / (3/2) = $26 per shareTherefore, after the 3-for-2 split, Katelyn will own 210 shares of the stock, and each share will be worth $26. The total value of her shares will be:
Total value = Number of shares x Price per shareTotal value = 210 x $26Total value = $5,460So Katelyn will own 210 shares worth $5,460 after the 3-for-2 split is announced.