Effect of A reduction in the par or stated value of a common stock and the issua

Question

Effect of A reduction in the par or stated value of a common stock and the issuance of a proportionate number of additional shares.Stock Split

Gino's Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Midwest. Gino's Restaurant Corporation, which had 33,000 shares of The stock outstanding when a corporation has issued only one class of stock.common stock outstanding, declared a 3-for-1 Shares of ownership of a corporation.stock split.

a. What will be the number of shares outstanding after the split?
?     shares

b. If the common stock had a market price of $144 per share before the stock split, what would be an approximate market price per share after the split?
?    $ per share

Explanation / Answer

a Numbers of shares after stock split 33000*3 99000 The shares will be 99000 shares b. Market price after stock split Total Value before the split = 33000*144 4752000 Market price after stock split = Total Value/ No of shares 4752000/99000 48 Market price per share will be $ 48 per share

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