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Wilson Pharmaceuticals stock has done very well in the market during the last three years. It has risen from $55 to $80 per share. The

Wilson Pharmaceuticals stock has done very well in the market during the last three years. It has risen from $55 to $80 per share. The firms current statement of stockholders equity is as follows:

Common stock (2 million shares issued at par value of $10 per share) $ 20,000,000
Paid-in capital in excess of par 16,000,000
Retained earnings 44,000,000


Net worth $ 80,000,000





a-1. How many shares would be outstanding after a two-for-one stock split? (Do not round intermediate calculations. Input your answer in millions (e.g., $1.23 million should be entered as "1.23").)

a-2. What would be its par value? (Do not round intermediate calculations and round your answer to 2 decimal places.)

b-1. How many shares would be outstanding after a three-for-one stock split? (Do not round intermediate calculations. Input your answer in millions (e.g., $1.23 million should be entered as "1.23").)

b-2 What would be its par value? (Do not round intermediate calculations and round your answer to 2 decimal places.)

c. Assume that Wilson earned $15 million. What would its earnings per share be before and after the two-for-one stock split? After the three-for-one stock split? (Do not round intermediate calculations and round your answers to 2 decimal places.)

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 10.67 stays the same.) (Do not round intermediate calculations and round your answers to 2 decimal places.)

price after 2 for 1 split-

price after 3 for 1 split-

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