Assume that you own 200 shares of General Dynamics Corp. (GD) selling at $90 per share. In
Question:
a. How much was your investment worth prior to the split?
b. Assuming GD's management decides to split the stock three-for-one, how many shares would you own after the split?
c. What would the new price per share be immediately after the split?
d. How much would your investment be worth after the three-for-one split?
Step by Step Answer:
a Prior to the split your shares of GD were worth 180000 9000 200 ...View the full answer
Personal Finance Turning Money into Wealth
ISBN: 978-0133856439
7th edition
Authors: Arthur J. Keown
Related Video
Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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