Question

Jessica currently owns 500 shares of Alpha stock valued at $19 share. What will her investment in Alpha be worth if the company declares a 4-for-3 stock split?

Answer 1

Answer:

The investment worth will be $9,500.

Explanation:

The total value of the investment will not change.  The reason behind this is that a stock split only splits the face value and market to a lesser amount. The split will cause the number of shares to increase and market value of each share will decrease proportionately.

The investment worth will be

= 500×$19

= $9,500