Question

Tarheel Computing's stock was trading at $150 per share before its recent 3-for-1 stock split. The 3-for-1 split led to a 5 percent increase in Tarheel's market capitalization. (Market capitalization equals the stock price times the number of shares.) What was Tarheel's price after the stock split

Answer 1

The amount of Tarheel's price after the stock split is $52.50.

In corporate business, the stock split refers to the action where the company divides its existing shares into multiple shares.

• Here, we are going to calculate Tarheel's price after the stock split.

• The formula for the Share price after stock split is [Share price before stock split * Stock split ratio * (1 + % increase market capitalization)]

Given Information

• Price stock before stock split = $150
• 3 for 1 split
• 5 % increase in capitalization

Share price after stock split = $150 * 1/3 * (1 + 0.05)

Share price after stock split = $150 * 1/3 * 1.05

Share price after stock split = $52.50

Therefore, the amount of Tarheel's price after the stock split is $52.50.

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Answer 2

Tarheel Computing's stock price after the 3-for-1 split based on the 5% increase in market capitalization is $52.50.

What is a Stock-Split?

A stock split is the division of a company's shares into more shares.  By such a division, the number of shares increases while the share price reduces.

For example, Tarheel's 3-for-1 stock split increases its outstanding shares by three times.

As noted in the question, market capitalization, which shows the total market value of the stock, equals the stock price times the number of shares outstanding.

Data and Calculations:

Stock price per share before stock split = $150

Stock split = 3-for-1

Increase in market capitalization = 5%

Stock price after the 3-for-1 split = $50 ($150/3)

Stock price after the 3-for-1 split based on the 5% increase in market capitalization = $52.50 ($50 x 1.05).

Thus, Tarheel Computing's stock price after the 3-for-1 split based on the 5% increase in market capitalization is $52.50.

Learn more about market capitalization and stock splits at brainly.com/question/20377743 and brainly.com/question/25300299