The Alligator Lock Company is planning a two-for-one stock split. You own 5,000 shares of Alligators common
Question:
The Alligator Lock Company is planning a two-for-one stock split. You own 5,000 shares of Alligator’s common stock, which is currently selling for $120 a share.
a. What is the total value of your Alligator stock now, and what will it be after the split?
b. Alligator’s CFO says that the value of the shares will decline less than proportionately with the split because the stock is now out of its trading range. If the decline is 45%, how much will the split make you?
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