The common stock of Fido Corporation was trading at $45 per share

The common stock of Fido Corporation was trading at $45 per share on October 15 of the previous year. A year later, on October 15 of the current year, it was trading at $80 per share. On this date, Fido’s board of directors decided to split the company’s common stock. 

a. If the company decides on a 2-for-1 split, at what price would you expect the stock to trade immediately after the split goes into effect? 

b. If the company decides on a 4-for-1 split, at what price would you expect the stock to trade immediately after the split goes into effect? 

c. Why do you think Fido’s board of directors decided to split the company’s stock?

Related Book For answer-question

Financial And Managerial Accounting The Basis For Business Decisions

19th Edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

ISBN: 9781260247930

Get help from Business Tutors
answer-question
Ask questions directly from Qualified Online Business Tutors .
answer-question Best for online homework assistance.
Questions related to Financial And Managerial Accounting The Basis For Business Decisions