Final answer:
The par value after a 2-for-1 stock split for Canton would be $5 and the number of shares outstanding would increase to 120,000. The stock split maintains the company's overall equity value while altering the number of shares and par value.
Step-by-step explanation:
Canton's stock split impact on par value and number of shares outstanding is: a. $5 par; 120,000 shares. After a 2-for-1 stock split, the par value of the shares is halved and the number of shares doubles.
That prior to the stock split, Canton has a par value of $10 per share and 60,000 shares outstanding. A 2-for-1 stock split means each share is divided into two, effectively doubling the number of shares. However, to maintain the balance of the company's equity structure, the par value per share is divided by two as well.
As a result, the new par value after the split is $5 ($10 ÷ 2 = $5) and the number of shares outstanding increases to 120,000 (60,000 × 2 = 120,000). The overall equity value of the company remains the same, but the shares are more affordable and attractive to a broader range of investors, potentially enhancing liquidity in the market. This decision does not directly impact the company's market capitalization or the value of shareholders' equity; it merely changes the format of its representation in shares.