Question

1. Effect of Stock Split

   Copper Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Copper Grill Restaurant Corporation, which had 45,000 shares of common stock outstanding, declared a 2-for-1 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 $108 per share before the stock split, what would be an approximate market price per share after the split?
   $ per share

Answer 1

Answers

• Requirement [a]

Total no of shares outstanding =45000 shares x 2/1 = 90,000 shares

• Requirement [b]
  Market price after stock split = $ 108 x ½ = $ 54 per share.