17-12B. (Stock split) You own 25 percent of the Star Corporation, which recently sold for $90 before
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17-12B. (Stock split) You own 25 percent of the Star Corporation, which recently sold for $90 before a planned two-for-one stock split announcement. Before the split tllere are 90,000 shares of common stock outstanding.
a.ı What is your financial position before the split, and what will it be after the stock split)
(Assume the stock falls proportionately.)
b.ı Your stockbroker believes the market will react positively to the split and that the price will fall only 45 percent after the split. If she is correct, what will be your net gain?
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Related Book For
Financial Management Principles And Applications
ISBN: 9780131450653
10th Edition
Authors: Arthur J. Keown, J. William Petty, John D. Martin, Jr. Scott, David F.
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