Nevada Corporation has 54,000 shares of $27 par stock outstanding that has a current market value of $160. If the corporation issues a 5-for-1 stock split, the number of shares outstanding will be a.54,000 b.729,000 c.270,000 d.216,000

Nevada Corporation has 54,000 shares of $27 par stock outstanding that has a current market value of $160. If the corporation issues a 5-for-1 stock split, the number of shares outstanding will be a.54,000 b.729,000 c.270,000 d.216,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 5MCQ

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

Nevada Corporation has 54,000 shares of $27 par stock outstanding that has a current market value of $160. If the corporation issues a 5-for-1 stock split, the number of shares outstanding will be

a.54,000

b.729,000

c.270,000

d.216,000

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