Becker Financial Recently Declared a 2-For-1 Stock Split

question 39

Multiple Choice

Becker Financial recently declared a 2-for-1 stock split.Prior to the split,the stock sold for $80 per share.If the firm's total market value is unchanged by the split,what will the stock price be following the split?

• A)$36.10
• B)$38.00
• C)$40.00
• D)$42.00
• E)$44.10

---

Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits and retained earnings that the company pays out to its shareholders.

Cost of Goods Sold

Outlays that directly contribute to the manufacture of goods sold by a company, comprising labor and materials.

Cash Basis

An accounting method that recognizes revenues and expenses only when money is actually received or paid out.

Sales Adjusted

The revision of sales figures to reflect returns, allowances for damaged goods, or changes due to promotional strategies, providing an accurate net sales number.