Determining the effects of stock splits on the accounting records
The market value of Coe Corporation’s common stock had become excessively high. The stock was currently selling for $180 per share. To reduce the market price of the common stock, Coe declared a 2-for-1 stock split for the 300,000 outstanding shares of its $10 par common stock.
Required
a How will Coe Corporation’s books be affected by the stock split?
b Determine the number of common shares outstanding and the par value after the split.
c Explain how the market value of the stock will be affected by the stock split.
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