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Gorton Corporation has 30,000 shares of $10 par value common stock outstanding, when it announces a 2-for-1 stock split. Before the split, the stock had a market price of $120 per share. After the split, how many shares of stock will be outstanding? Common Stock Outstanding? What will be the approximate market price per share?

Respuesta :

zainsubhani

Answer:

Common Stock Outstanding Shares=60,000 shares

Market Price Per share= $60

Explanation:

2-for-1 stock split means that every shareholder will receive additional common stock on each share.

Given Data:

Number of shares=30,000 shares

Market price per share=$120

Required:

Common Stock Outstanding=?

Market Price per share=?

Solution:

After split, Common Stock Outstanding Shares=30,000 shares*2

Common Stock Outstanding Shares=60,000 shares

Due to the split the price of share will become half.

Market Price per share=$120/2

Market Price Per share= $60

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