Reference no: EM132577893
Assume you own 200 shares of General Dynamics Corp. (GD) selling at $90 per share. In order to make the stock more affordable for the average investor, GD's management has decided to split the stock.
Question a. How much was your investment worth prior to the spit?
200(#Shares)x90(Price per share)=$18,000
Question b. Assuming GD's management decides to split the stock three-for-one, how many shares would you own after the split?
200(#shares)X3=600
Question c. What would the new price per share be immediately after the split?
90(price per share)/3=$30
Question d. How much would your investment be worth after the three-for-one split?
600(new#of shares)x$30(new price)= $18,000
Does this seem right that the beginning and the end would be the same, what was the point of the split with no benefit
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