In a Three for Two Stock Split for a Company

In a three for two stock split for a company that previously had 1 million shares outstanding selling at $100 per share and a total market value of $100 million, which of the following is true:

A) the number of outstanding shares will drop to 666,666, and the stock price will increase to $150.
B) the number of outstanding shares will increase to 1.5 million, and the stock price will drop to $66.67.
C) the number of outstanding shares will increase to 1.5 million, and the stock price will rise to $133.33.
D) the market value of the firm will increase.

Correct Answer:

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