For the company in Problem 2, show how the equity accounts will change if: a. The company

Question:

For the company in Problem 2, show how the equity accounts will change if:

a. The company declares a four-for-one stock split. How many shares are outstanding now? What is the new par value per share?

b. The company declares a one-for-five reverse stock split. How many shares are outstanding now? What is the new par value per share?

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,...