declared a 2for1 stock split when it had 12000 shares of 5 p

declared a 2-for-1 stock split when it had 12000 shares of $5 par value common stock outstanding. If the market price of pproximate market value after the split would be before the split, the par value, number of shares and a lue A) $2.50 B) $2.50 C) $2.50 D) $5.00 24,000 24.000 12,000 24.000 $10.00 5.00 $10.00 $20.00 O Choice D O Choice B O Choice A O Choice C

Solution

Total number of shares would double while par value and market value decrease.

Total number of shares after the split=(12000*2)=24000 shares

Par value after the split=$5/2=$2.50

Market price after the split=$20/2=$10

Hence the correct option is Choice A.