In a Three-For-Two Stock Split for a Company That Previously

question 65

Multiple Choice

In a three-for-two stock split for a company that previously had 1 million shares outstanding selling at $100 per share and a total market value of $100 million,which of the following is true?

• A) The number of outstanding shares will drop to 666,666, and the stock price will increase to $150.
• B) The number of outstanding shares will increase to 1.5 million, and the stock price will drop to $66.67.
• C) The number of outstanding shares will increase to 1.5 million, and the stock price will rise to $133.33.
• D) The market value of the firm will increase.

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