Yesterday, at the market close, the stock of Kevin Spellman, Inc. was trading at $200 per share, and there were 800,000 shares outstanding. This morning, Kevin Spellman, Inc. announced it was doing a 4:1 stock split before the market opened. Under the efficient market hypothesis and with no new information, what will be the new stock price in dollars per share?

Yesterday, at the market close, the stock of Kevin Spellman, Inc. was trading at $200 per share, and there were 800,000 shares outstanding. This morning, Kevin Spellman, Inc. announced it was doing a 4:1 stock split before the market opened. Under the efficient market hypothesis and with no new information, what will be the new stock price in dollars per share?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation

Section: Chapter Questions

Problem 9MC

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