Question

The market value of Yeates Corporation’s common stock had become excessively high. The stock was currently selling for $240 per share. To reduce the market price of the common stock, Yeates declared a 3-for-1 stock split for the 100,000 outstanding shares of its $10 par value common stock.
Required
a. What entry will be made on the books of Yeates Corporation for 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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  • CreatedApril 20, 2015
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