STOCK SPLIT Toy World reported the following information:

Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding.

Required:

What is the typical effect of a 2-for-1 stock split on the information Toy World’s reports above? If the market value of the common stock is $20 per share when the stock split is declared, what would you expect the approximate market value per share to be immediate after the split?

Cornerstone Exercise