If Gator declared a 2-for-1 stock split on the common stock, how many shares wou
ID: 2333964 • Letter: I
Question
If Gator declared a 2-for-1 stock split on the common stock, how many shares would be outstanding after the split? What amount would be transferred from the Retained Earnings account because of the stock split? Theoretically, what would be the market price of the common stock immediately after the stock split?
The stockholders’ equity section of the balance sheet for Gator Company at December 31, 2014, is as follows:
2,217,000
If Gator declared a 2-for-1 stock split on the common stock, how many shares would be outstanding after the split? What amount would be transferred from the Retained Earnings account because of the stock split? Theoretically, what would be the market price of the common stock immediately after the stock split?
The stockholders’ equity section of the balance sheet for Gator Company at December 31, 2014, is as follows:
Explanation / Answer
Share outstanding after stock split = (59000-3000)*2) = 112000 Shares
There is no amount should be transferred in retained earnings account because of stock split.
Market price is not given in question So we cant find ot market price after split