Question

Becker Financial recently completed a 7-for-2 stock split. Prior to the split, its stock sold for $90 per share. If the total market value was unchanged by the split,what was the price of the stock following the split?
Answer
$23.21
$24.43
$25.71
$27.00
$28.35

Answer 1

Answer 2

Splittingstocks is more attractive to buyers ifthepriceis low. Therefore, most companies will split theirstocks when the price gets high.

One stock at $90 per share = Two stocks at $45 per share.

A 7-for-2 stock sounds to me as if two shares become 7 shares, which equals in cost the previous cost of 2 shares. If each share costs $90, howmuch would 2 shares cost?
$90 x 2 = $180
How much does each share cost now after a 7-for-2 split? To find the answer, divide $180 by 7.
$180 / 7 = $25.71 per share

Answer 3

price of the stock after the split = 90*(2/7) = $25.71

Answer 4

Becker Financial recently completed a 7-for-2 stock split. Prior to the split, its stock sold for $90 per share. If the total market value wasunchanged by the split, what was the price of the stock following the split?

Answer 5

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