Question
You are holding 500 shares of a company that you bought years ago at $40 per share. The board of directors has announced a 3-for-1
You are holding 500 shares of a company that you bought years ago at $40 per share. The board of directors has announced a 3-for-1 stock split of its common stock. Just before the stock split, each share was selling for $99. You are in the 28% federal income tax bracket.
(A)How many shares of the company will you own after the stock split?
(B)What will the price per share be immediately after the split?
(C)Compare the value of your total shares of stock immediately before and after the split. How do the values compare?
(D)Did your portfolio have a gain or a loss due to the split?
(E)What, if any, is your tax liability
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