Multiple Choice
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 1 million shares x (.15) = 1.5 million
Since total market value does not change:
Correct Answer:
Verified
Correct Answer:
Verified
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