Question

A corporation has 25,000 shares of $10 par stock outstanding. How many shares would be outstanding after a 5-for-1 stock split

Answer 1

125,000

Step-by-step explanation:

When a 5-for-1 stock split takes place, for every outstanding stock, 4 more are created. In this case, there are 25,000 outstanding stocks, which means that 25,000 x 4 = 100,000 more will be issued. In total, 25,000 + 100,000 = 125,000 stocks will be outstanding after the stock split.