How many shares would be outstanding after a two-for-one

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Reference no: EM132057127

Assignment

Wilson Pharmaceuticals' stock has done very well in the market during the last three years. It has risen from $15 to $40 per share. The firm's current statement of stockholders' equity is as follows:

Common stock (5 million shares issued at par value of $10 per share)	$	50,000,000
Paid-in capital in excess of par		16,000,000
Retained earnings		44,000,000

Net worth	$	110,000,000

a-1. How many shares would be outstanding after a two-for-one stock split?

a-2. What would be its par value?

b-1. How many shares would be outstanding after a three-for-one stock split?

b-2 What would be its par value?

c. Assume that Wilson earned $15 million. What would its earnings per share be before and after the two-for-one stock split? After the three-for-one stock split?

d. What would be the price per share after the two-for-one stock split? After the three-for-one stock split? (Assume that the price-earnings ratio of 13.33 stays the same.)

Reference no: EM132057127

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