Answer to Question #172615 in Economics for leighton downie

Question

1. Mennen Corporation has 30,000 shares of $10 par value common stock outstanding when it announces a 2-for-1 stock split. Before the split, the stock had a market price of $120 per share. After the split, how many shares of stock will be outstanding? What will be the approximate market price per share?

Answer 1

$$30000+\frac{30000}{1}\times 2=90000$$

$$\frac {120\times 30000}{90000}=40$$