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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

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-l 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 alter the split?

(a)

To determine

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.

To determine: The number of shares outstanding after the split.

Explanation

Determine the number of shares outstanding after the split.

Number of sharesoutstanding after the split}[Number of shares outstanding before 

(b)

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

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