Problem

Smelling Company declared a 2-for-l stock split on its common stock in order to intentiona...

Smelling Company declared a 2-for-l stock split on its common stock in order to intentionally reduce the market value of its stock so that it would be an attractive investment for a larger set of investors. The company's common stock is described as follows:

Common stock: 100,000 shares outstanding, $ 10 par value, originally sold at $ 12.50. current market price $50.

Describe the likely impact, if any. that the 2-for-l stock split will have on (a) the number of shares outstanding, (b) the market price of the stock, and (c) the total stockholder’s equity attributable to common stock.

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