Question

5. Elmofud, Inc. is considering splitting its stock. The stock is currently priced at $90 per share. You own 100 shares of the stock. If the firm proceeds with a 3 for 1 split what will your position in the stock be after the split – how many shares will you own, what will the price per share be, and what will your total value be in the stock of Elmofud, Inc.?

Answer 1

Answer:

total value be in the stock $9,000

Explanation:

given data

currently priced = $90 per share

Number of Stocks = 100 share

solution

we get here first Value of Position that is express as

Value of Position = $90  × 100

Value of Position = $9,000

and

After stock split

Number of Stocks will be

Number of Stock  = 100 × 3 = 300

and

Price per Share will be

Price per Share = $\frac{90}{3}$  

Price per Share = $30

so

Value of Position = 30 × 300

Value of Position = $9,000