Pharma Duece Corporation, which manufactures biotech drugs, has been experiencing a tremendous growth in the price of its common stock. The stock price increased from $4.50 on January 1, 20X1 to $18.00 per share on December 31, 20X5. Its current net worth statement is as follows:

Common stock (2.0 million shares)	$37,000,000
Retained earnings	$33,000,000
	$70,000,000

Required:

1. What changes would occur in the above statement after a 2 for 1 stock split?
2. Earnings for 20X5 were $1,575,000, what would EPS be before and after the stock split?
3. Does stock split change shareholder wealth? Explain.
4. Why might a company split its shares? Explain.