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1 December, 10:53

Purvis Lawn Products has 5,400 shares of stock outstanding at a market price of $6.37 a share. What will the market price per share be if the company does a reverse stock split of one-for-three

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  1. 1 December, 11:07
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    The market price per share is $2.12

    Explanation:

    For computing the market price per share, we have to apply the method which is shown below:

    = Market price * stock split ratio

    where,

    Market price per share is $6.37

    Stock split is one for three

    = $6.37 * 1 : 3

    = $2.12

    In stock split, we divide 1 by 3 to get the correct to get the accurate market price per share. The three for 1 fraction is wrong which gives wrong value. So, we use the one for three fraction.

    Hence, the market price per share is $2.12
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