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10 October, 08:07

On June 5, 2019, ABC Inc. instituted a 4-for-1 stock split. Before the split, ABC Inc. had 200,000 shares outstanding with a price of $168 per share. Show that the stock split for ABC Inc. was a monetary non-event.

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  1. 10 October, 10:35
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    Post split Shares: 800,000

    Post split par value: $42

    Explanation:

    Given:

    Number of out standing shares: 200,000 Price per share: $168

    ABC Inc. instituted a 4-for-1 stock split, it means that every holder of 1 share will receive 4 shares. So the total of outs standing stock will be increased 4 time, which is:

    200,000*4 = 800,000 shares

    The price of a split stock is calculated by dividing the face value of the proposed share:

    $168 / 4 = $42 per share

    So:

    Post split Shares: 800,000 Post split par value: $42
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Home » Business » On June 5, 2019, ABC Inc. instituted a 4-for-1 stock split. Before the split, ABC Inc. had 200,000 shares outstanding with a price of $168 per share. Show that the stock split for ABC Inc. was a monetary non-event.
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