<h3>
Answer: $117.72</h3>
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Explanation:
Let's say that the company is valued at $300 just as a simple example.
Also, let's say there are 100 shares each worth $3, so we have 100*3 = 300 as the total value of the company.
A 3-for-1 split means that for each share, it will get turned into 3 shares. So you turn in 1 share and in return you get 3 shares back. Or put another way, each share is ripped/cut into 3 equal pieces.
After doing this split, we would have 3*100 = 300 shares and each share would be now worth (1/3)*3 = 1 dollar. Note the new number of shares multiplied with the new value per share is still the same total valuation of $300. Doing a stock split, or a reverse stock split, will not change the value of the company. This is a good thing or else companies would simply do (reverse) splits all the time to increase their value however large they wanted without actually contributing anything to society.
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So quite simply, when we do a 3-for-1 split, we multiply the old price per share by 1/3 to get the new price per share.
Let
x = old price per share
y = new price per share
So x happens before the split and y is after the split.
For a 3-to-1 split, we can form this equation
y = (1/3)x
which solves to
x = 3y
when we multiply both sides by 3
We know that y = 39.24, which means,
x = 3y
x = 3*39.24
x = 117.72
The pre-split price per share was $117.72
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So in short, all we did was multiply the given number (39.24) by 3.
