Question

Effect of Stock Split Willey's Grill & Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Willey's Grill & Restaurant, which had 57,000 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 $156 per share before the stock split, what would be an approximate market price per share after the split? $ per share

Answer 1

Answer

a. )

Number of shares outstanding after split = 114000 shares.

Explanation;

A 2 for 1 stock split means that now there will be 2 shares for every 1 share held

Number of outstanding shares before split = 57000 shares

Total number of shares outstanding after 2 for 1 stock split = 57000*2 = 114000.

b.)

Market price after split = $ 78 per share

Explanation;

Market price before stock split = $ 156

Market price after 2 for 1 stock split =$ 156/2 = $ 78 per share