On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 50 million, $1 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $19 on June 13.
What is the par per share after the split?
Solution
Computation of par per share after the split of Siewert Inc.We have,
Total Number of share before the split = 50 Million shares
After the split of share in the ratio of 2:1
Total number of share after the split = 50 x 2 = 100 Million shares.
After the split,Number of share increase and par value of share decrease.In this case, number of share increase by doubule.So, par value of share decrease by half.
Par value of share before split = $ 1 per share
Per value of share after split = $ 1/2 = $ 0.50 per share.
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On June 13- the board of directors of Siewert Inc- declared a 2-for-1.docx
1. On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 50 million,
$1 par, common shares, to be distributed on July 1. The market price of Siewert common stock
was $19 on June 13.
What is the par per share after the split?
Solution
Computation of par per share after the split of Siewert Inc.We have,
Total Number of share before the split = 50 Million shares
After the split of share in the ratio of 2:1
Total number of share after the split = 50 x 2 = 100 Million shares.
After the split,Number of share increase and par value of share decrease.In this case, number of
share increase by doubule.So, par value of share decrease by half.
Par value of share before split = $ 1 per share
Per value of share after split = $ 1/2 = $ 0.50 per share.
