Question

Assume that you own 100 shares of common stock of a company, that you have been receiving cash dividends of $7 per share per year, and that the company has a 3-for-2 stock split. Required: How many shares of common stock will you own after the stock split

Answer 1

Answer: 150 shares

Explanation:

If the company has a 3 for 2 stock split, this means that for every 2 stocks you had, you will get 3 instead.

With 100 shares in the company, your new stock ownership amount after the split will be;

= 100 * 3/2

= 150 shares