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Maple Inc. and Acer Corporation each have total stockholders' equity of $2 million. Each company's stock has a par value of $20 per share
Maple Inc. and Acer Corporation each have total stockholders' equity of $2 million. Each company's stock has a par value of $20 per share and a market value of $40 per share. Maple Inc. issues a 2-for-1 stock split and Acer Corporation issues a 4-for-1 stock split. How does the par value of each company's stock compare after the stock splits? The par value of stock at Maple Inc. will be $40 per share, while the par value of stock at Acer Corporation will be $100 per share. The par value of stock at Maple Inc. will be $10 per share, while the par value of stock at Acer Corporation will be $5 per share. The par value of stock at each company will remain equal but both will be reduced to $10 per share. The par value of stock will not be changed by a stock split, so the value of both will remain at $20 per share.
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