Assume that you own 500 shares of $10 par value common stock of a company and the

Question:

Assume that you own 500 shares of $10 of a company and the company has a 2-for-1 stock split when the market price per share is $40.

Required:
a. How many shares of will you own after the stock split?
b. What will probably happen to the market price per share of the stock?
c. What will probably happen to the per share of the stock?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...