Question

A corporation has 50,000 shares of $100 par value stock outstanding that has a current market value of $180. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately$30.$36.$45.$50.

Answer 1

Answer:

correct option is C. $45

Explanation:

given data

par value = $100

share = 50000

current market value = $180

stock split = 4 for 1

solution

we get here market value of the stock  fall that is

market value of the stock fall = current market value ÷ stock split    .........................1

put here value and we get

market value of the stock fall =  $\frac{180}{4}$

market value of the stock fall = $45

so here correct option is C. $45