XYZ Corporation has 450,000 outstanding shares with a par value of p 100 per share. Ignore market imperfections or tax effects, what will the par value per share after each of the following independent assumptions:

a. stock split of 2 for 1 means any investor holding 1 share will receive two stocks. In stock split market value does not changes, so par value will become half to adjust the book value of shares.

Number of stocks after split = 450000*2 = 900000

Par value of stock before split = 450000*100 = 45000000

Par value after split = 100/2 = 50

Par value of stock after split = 50* 900000 = 45000000

.so the answer is 50.

-b. In 20% stock dividend an investor holding 5 share will receive an additional share.

Number of new shares issued = 450000*.2 = 90000

Total o/s share = 450000+ 90000 = 540000

Book value before dividend declared = 450000*100 = 45000000

After dividend par value will reduce to

540000* Par value per stock = 45000000

Par value of stock = 45000000/540000 = 83.33

Please answer letter C.

c. XYZ has a 3-for-5 reverse stock split.

Answer: P____