Homework Answers
A. Shares of common stock after split = 128× 2 = 256
Because in a 2 for 1 stock split you will have 2 shares for every 1 share held by you after split.since now you own 128 shares, after split you will have 256 shares.
B. The market price per share should decrease because the number of shares have increased it will lead lo fall in market prices. Market price of the stock will be half of the market price before stock split = 50/2 = 25 But total market value will remain unchanged because
Market value before stock split = 128 × 50 = 6400
Market value after stock split = 256 × 25 = 6400
C. The par value of share will be 12/2 = 6 because the number of shares have increased it will result in decrease in par value of share since number of shares increasd by 2 times th par value of shares wil be half of the par value of the share .Total par value of shares will remain unchanged
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