Computing price of company-s stock


Q1) Urlacher Digital's stock is trading at $120 share. Company plans to announce a 3-for-2 stock split. Stock split is expected to increase company's market capitalization by 5%.  Determine the expected stock price after stock split is completed?

 

a. $189.00

 

b. $84.00

 

c. $80.00

 

d. $50.40

 

e. $75.60

 

Q2) Albany Motors currently completed a 3-for-1 stock split.  Previous to split, company had 10 million shares outstanding and its stock price was $150 per share.  After split, total market value of company's stock equaled $1.5 billion.  Compute the price of company's stock following stock split?

 

a.  $15

 

b. $45

 

c. $50

 

d.  $150

 

e.  $450

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Accounting Basics: Computing price of company-s stock
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