(Stock splits and large stock dividends?) Marston Mfg. recently declared a 4?-for-1 stock split for its common shares. Before the split the? firm's share price had risen to? $600 per share and the? firm's CFO felt that this high stock price inhibited trading in the? firm's shares. Prior to the split the firm had 10 million shares of stock outstanding and had net income of $40million.
a. Before the stock split what is? Marston's earnings per? share?
b.Following the stock? split, how many shares of common stock will Marston have? outstanding?
c. What are the? firm's earnings per share after the stock? split?
d. If you owned 100 shares of stock before the? split, how much are the total earnings for your? shares? How much are the total earnings on your? post-split shares?
e. Were you better off financially as the holder of 100 shares of? pre-split stock after the 4?-for-1 ?split?