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Smelling Company declared a 2-for-1 stock split on...

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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 stock, and (c) the total stockholders' equity attributable to common stock.

 

Paper#1424 | Written in 18-Jul-2015

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