Shadows, Inc., had shares outstanding that were valued at $120 per share before a two-for-one stock split.
Question:
Shadows, Inc., had shares outstanding that were valued at $120 per share before a two-for-one stock split. After the stock split, the shares were valued at $62 per share. If we accept that the firm’s financial maneuver did not create any new value, then why might the market value of the shares increase?
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We know that the stock split did not create value for investors by itself Therefore there must be ...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1119371403
4th edition
Authors: Robert Parrino, David S. Kidwell, Thomas Bates
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