Question

The common stock of High Energy is selling for $58 per share. Currently, the firm has a total market value of $1,314,900 and a book value of $647,600. How many shares of stock will be outstanding if the firm does a stock split of 5-for-2

Answer 1

The number of shares of stock that will be outstanding if the firm does a stock split of 5-for-2 is $56,677.

Using this formula

Outstanding shares=(Total market value/Common stock per share)×Stock split

Let plug in the formula

Outstanding shares=($1,314,900 /$58)×5/2

Outstanding shares=$56,676.72 shares

Outstanding shares=$56,677 shares (Approximately)

Inconclusion the number of shares of stock that will be outstanding if the firm does a stock split of 5-for-2 is $56,677.

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