Question

brinkley resources stock has increased significantly over the last five years, selling now for $200 per share. management feels this price is too high for the average investor and wants to get the price down to a more typical level, which it thinks is $25 per share. what stock split would be required to get to this price, assuming the transaction has no effect on the total market value? put another way, how many new shares should be given per one old share?6.657.008.008.359.00

Answer 1

To lower the stock price from $200 per share to $25 per share, an 8-for-1 stock split would be required.

Step-by-step explanation:

A stock split is a corporate action in which a company increases the number of its outstanding shares while maintaining the same market value. In this case, the management of Brinkley Resources wants to decrease the stock price from $200 per share to $25 per share. To achieve this, they can implement an 8-for-1 stock split. This means that for every one old share, investors will receive eight new shares. After the split, the number of outstanding shares will increase, and the share price will decrease proportionally.