Ramon's Has 21,000 Shares of Stock Outstanding with a Par

question 342

Multiple Choice

Ramon's has 21,000 shares of stock outstanding with a par value of $1.00 per share and a market price of $27 a share. The firm just announced a 5-for-3 stock split. How many shares of stock will be
Outstanding after the split?

• A) 12,600 shares
• B) 21,000 shares
• C) 27,000 shares
• D) 35,000 shares
• E) 42,400 shares

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Definitions:

Revoke

To officially cancel or withdraw an offer, license, right, or permission that has been granted.

Letter of Credit

A financial document issued by a bank guaranteeing a buyer's payment to a seller within a specified timeframe and under agreed conditions.

Formal Contract

A contract that by law requires a specific form, such as being executed under seal, to be valid.

Unilateral Contracts

Contracts in which one party makes a promise in exchange for the other's performance, which fulfills the contract.