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25 February, 15:17

Alfonzo's Italian House has 17,000 shares of stock outstanding with a par value of $1 per share and a market price of $24.60 a share. The firm just announced a stock split of three-for-two. What will be the market price per share after the split

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  1. 25 February, 15:19
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    The market price per share after the split would be of $16.40

    Explanation:

    In order to calculate the market price per share after the split we would have to calculate first the shares outstanding after stock split as follows:

    According to the given data The firm just announced a stock split of three-for-two

    Therefore, shares outstanding after stock split = 17,000 * 3/2 = 25,500

    Therefore, price per share after split = 17,000 * $24.60/25,500

    Price per share after split = $16.40

    The market price per share after the split would be of $16.40
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