Presler Company declared a 2-for-1 stock split on its common stock in order to intentionally reduce the
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Presler Company declared a 2-for-1 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. Presler’s common stock before the split is described as follows:
Common stock: 100,000 shares outstanding, $10 par value, originally sold at $12.50, current market price $50.
Describe the expected impact, if any, that the 2-for-1 stock split will have on (a) The number of shares outstanding, (b) The market price of the stock, and (c) The total stockholders’ equity attributable to common stock.
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The stock split will double the number of shares outstanding from 100000 to 200000 It wi...View the full answer
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Financial And Managerial Accounting The Basis For Business Decisions
ISBN: 9781264445240
20th Edition
Authors: Jan Williams, Susan Haka, Mark Bettner
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