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Effect of stock split Copper Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Copper Grill Restaurant Corporation, which had 50,000 shares of common stock outstanding, declared a 3-for-1 stock split. a. What will be the number of shares outstanding after the split? b. If the common stock had a market price of $210 per share before the stock split, what would be an approximate market price per share after the split?

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Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

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BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 13, Problem 11E
Textbook Problem
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Effect of stock split

Copper Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Copper Grill Restaurant Corporation, which had 50,000 shares of common stock outstanding, declared a 3-for-1 stock split.

  1. a. What will be the number of shares outstanding after the split?
  2. b. If the common stock had a market price of $210 per share before the stock split, what would be an approximate market price per share after the split?

(a)

To determine

Calculate the number of shares outstanding after the split.

Explanation of Solution

Stock Splits: It is a method of increasing the total number of outstanding shares thereby, reducing the market price of each share, however, keeping the corporation’s total market value constant.

Determine the number of shares outstanding after the split.

  Number of sharesoutstanding after the split}[Number of�

(b)

To determine

Calculate the approximate market price per share after the split, if market price per share before the stock split is $210.

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Chapter 13 Solutions

Financial Accounting
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