Question

Robinson's has 46,000 shares of stock outstanding with a par value of $1 per share and a market price of $52 a share. The balance sheet shows $46,000 in the common stock account, $515,000 in the paid in surplus account, and $530,000 in the retained earnings account. The firm just announced a 2-for-1 stock split. How many shares of stock will be outstanding after the split?

Answer 1

The answer is 92,000 shares.

Step-by-step explanation:

Stock split occurs when new shares are issued to existing shareholder. A stock split adds or increases the number of shares outstanding in a company.

For example, A 2-for-1 stock split means that for every one share held by an investor, there will now be two shares.

Robinson's has 46,000 shares of stock outstanding

Therefore, a 2-for-1 stock split is:

2 x 46,000 shares

92,000 shares.

The total number of outstanding shares after the split is 92,000 shares