The market value of Mason Corporations common stock had become excessively high. The stock was currently selling

Question:

The market value of Mason Corporation’s common stock had become excessively high. The stock was currently selling for $180 per share. To reduce the market price of the common stock, Mason 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 Mason 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.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...