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On June 18, Selma Corp. had 20,000 shares of $6 par value common stock outstanding before it declared a 2-for-1 stock split.
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Answer #1
(1)-The number of shares after the stock-split
The number of shares after the stock-split = Shares outstanding x Stock-spli ratio
The number of shares after the stock-split = 20,000 Shares x (2/1)
The number of shares after the stock-split = 40,000 Shares
(2)-Market price of a stock after the stock-split
Market price of a stock after the stock-split = Markte price before stock-spli / Stock-split ratio
Market price of a stock after the stock-split = $50.00 / (4/1)
Market price of a stock after the stock-split = $25.00
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