What is the par value of its stock after the split?

606 views
0

A company has 360,000 shares authorized, 200,000 shares issued, and 100,000 shares outstanding. The balance in its Common Stock account is $200,000. The company does a 2-for-1 stock split. What is the par value of its stock after the split?

$1.00

$0.50

$2.00

$3.00

$4.00

0

Answer : par value of its stock after the split $

Stock splits are means increase the number of shares outstanding and it will reduce the par or stated value per share.

Example = Two-for-one stock split would double the number of shares outstanding and halve the par value per share.

Here in thissituation company does a 2-for-1 stock split

means for 100,000 share there is 200,000 value

now the shares will be 200,000 for 200,00 value

so share price vaue will be $ 1 = 200,000/200,000

Contact us today

Ask for our academic services

Copyright SmartStudyHelp 2016. All Rights Reserved