Question

Copper Grill Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Copper Grill Restaurant Corporation, which had 50,000 shares of common stock outstanding, declared a 3-for-1 stock split. a. What will be the number of shares outstanding after the split? ________shares b. If the common stock had a market price of $210 per share before the stock split, what would be an approximate market price per share after the split? $______ per share

Answer 1

150,000 Shares

70$ per share

Step-by-step explanation:

Stock split at a rate of 3 for 1 means that holder of every 1 share will have total 3 shares after the split (e.g. he will receive additional two shares for each share he owns). Thus Copper Grill Restaurant Corporation's total shares will increase from 50,000 to 150,000 (50,000 * 3).

Per share price will be divided by 3 to arrive at approximate value of per share after the split (210 / 3) = $70 / per share.