14. Comfort realty has 100,000 shares outstanding with a market value of $150/share and a par...
14. Comfort realty has 100,000 shares outstanding with a market value of $150/share and a par value of $10 per share. What is the number of shares outstanding and the value of each share when the company does a 3-for-1 stock split?
Homework Answers
Number of shares outstanding after stock split= 300000
Market value per share= $50
Working 1
|
Before split |
After split |
|
|
Number of shares outstanding |
100000 |
300000 |
|
Market value per share |
$ 150.00 |
$ 50.00 |
|
Total market value of shares or Market cap |
$ 1,50,00,000.00 |
$ 1,50,00,000.00 |
When stock split is done the total stockholder’s equity remains same only the number of shares increase.
Working 2
|
Before split |
After split |
|
|
Number of shares outstanding |
100000 |
=100000*3 |
|
Market value per share |
150 |
=150/3 |
|
Total market value of shares or Market cap |
=100000*150 |
=300000*50 |
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