Wilson Pharmaceuticals stock has done very well in the market during the last three years. It has risen from $45 to $70 per share. The firms current statement of stockholders equity is as follows:

Common stock (3 million shares issued at par value of $10 per share) $ 30,000,000

Paid-in capital in excess of par 19,000,000

Retained earnings 46,000,000

Net worth $ 95,000,000

a-1. How many shares would be outstanding after a two-for-one stock split?

a-2. What would be its par value?

b-1. How many shares would be outstanding after a three-for-one stock split?

b-2 What would be its par value?

c. Assume that Wilson earned $12 million. What would its earnings per share be before and after the two-for-one stock split? After the three-for-one stock split?

EPS before :

EPS after 2-for-1 split :

EPS after 3-for-1 split :

d. What would be the price per share after the two-for-one stock split? After the three-for-one stock split? (Assume that the price-earnings ratio of 17.50 stays the same.)

Price after 2-for-1 split
Price after 3-for-1 split