ABC Communications recently completed a 5-for-3 stock split. Prior to the split, its stock price was...

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ABC Communications recently completed a 5-for-3 stock split. Prior to the split, its stock price was...

ABC Communications recently completed a 5-for-3 stock split. Prior to the split, its stock price was $70 per share. The firm's total market value increased by 20% as a result of the split. What was the price of the company’s stock following the stock split?

a.	$46.2
	b.	$67.2
	c.	$61.6
	d.	$50.4

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Answer 1

Answer #1

Stock price before split=$70

Each of 3 shares became 5 shared after split...

Stock price after split will be=3(70)÷5

=210÷5

=42...

Increase in market value after split =20℅

Therefore market price of stock after split=42+20℅=50.4 per share...

Answer will be

d)50.4 per share...

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Answer 2

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