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Suppose you own 5% of Coastal Corporation's 400,000 outstanding common shares. The stock was trading for $135 per share before Coastal executives announced a 3-for-2 stock split. After the split, you will own _____ shares worth _____ per share.

Respuesta :

Answer:

number of share 30,000 share

price per share = $90

Explanation:

given data:

investor's share = 5%

outstanding share =400,000

stock split = 3/2

number of share after spliting = investor share* outstanding share* stock split

                                                  = 5%*400,000*(3/2)

                                                   = 30,000 share

per share price can be determined by using following relation:

[tex]price\  per\  share =\frac{ outstanding\  share*\  trading\ price * investor's\  share}{ number\  of \ share\  after \ splittg}[/tex]

                             [tex]= \frac{40000 *135*0.05}{30000}[/tex]

                               = $90

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