Question

If a 2-for-1 stock split was instituted before Imene bought 100 shares of the stock, how many shares does she own after the split?

Option 1: 50 shares
Option 2: 75 shares
Option 3: 100 shares
Option 4: 200 shares

Answer 1

After a 2-for-1 stock split, Imene will own 200 shares since the number of shares she owned originally (100 shares) is doubled. Thus, the correct answer is Option 4.

Step-by-step explanation:

When a 2-for-1 stock split occurs, it means that the number of shares is doubled and the price per share is halved. This does not affect the overall value of one's investment in the company but does increase the number of shares they hold.

In Imene's case, she originally owns 100 shares. After a 2-for-1 stock split, each share she owns is split into two shares. Therefore, she will own 200 shares after the split (100 original shares x 2 = 200 shares). The correct option is Option 4 which states she owns 200 shares after the stock split.