Question

Outstanding SharesWillis & Company has 20 million shares of $1 par value common stock outstanding. The company believes that its current market price of $100 per share is too high and decides to execute a 4-for-1 forward stock split to lower the price.How many shares will be outstanding following the stock split? What will be the new par value per share?

Answer 1

Answer:

a. 80.000.000

b. $0.25 per share

Check the following calculations below.

Explanation:

According to the information provided in the exercise:

a) Outstanding share after stock split = 20.000.000 *4 = 80.000.000

b) New par value per share = 1/4 = $0.25 per share