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11.8 Smelling Company declared a 2- for- 1 stoc...

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11.8 Smelling Company declared a 2- for- 1 stock split on its common stock in order to intentionally reduce the market value of its stock so that it would be an attractive investment for a larger set of investors. The company?s common stock is described as follows: Common stock: 100,000 shares outstanding, $ 10 par value, originally sold at $ 12.50, current market price $ 50. Describe the likely impact, if any, that the 2- for- 1 stock split will have on ( a) the number of shares outstanding, ( b) the market price of the stock, and ( c) the total stockholders? equity attributable to common stock.

 

Paper#1423 | Written in 18-Jul-2015

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