Robinsons has 36000 shares of stock outstanding with a par v

Robinson\'s has 36,000 shares of stock outstanding with a par value of $1.00 per share and a market price of $52 a share. The balance sheet shows $36,000 in the common stock account, $460,000 in the paid in surplus account, and $420,000 in the retained earnings account. The firm just announced a 3-for-1 stock split. How many shares of stock will be outstanding after the split?

12,000 shares 96,000 shares 108,000 shares 72,000 shares 107,500 shares

Solution

present number of shares = 36,000

stock split is = 3 for 1

new shares is =36000*3/1

=108,000 shares

(so number of shares outstanding is not changed based on price of shars )