Alfonzo's Italian House has 17,000 shares of stock outstanding with a par value of $1 per share and a market price of $24.60 a s

Question

Vaselesa [24]

4 years ago

14

Alfonzo's Italian House has 17,000 shares of stock outstanding with a par value of $1 per share and a market price of $24.60 a s

hare. The firm just announced a stock split of three-for-two. What will be the market price per share after the split

Business

1 answer:

erastovalidia [21] · Answer 1 · 2022-01-02T20:48:17+03:00

Answer:

The market price per share after the split would be of $16.40

Explanation:

In order to calculate the market price per share after the split we would have to calculate first the shares outstanding after stock split as follows:

According to the given data The firm just announced a stock split of three-for-two

Therefore, shares outstanding after stock split = 17,000 * 3/2 = 25,500

Therefore, price per share after split = 17,000 * $24.60/25,500

Price per share after split =$16.40

The market price per share after the split would be of $16.40