Hexagon declares a four-for-one stock split. How many shares are outstanding now
ID: 2745387 • Letter: H
Question
Hexagon declares a four-for-one stock split. How many shares are outstanding now? (Do not round intermediate calculations.)
Hexagon declares a four-for-one stock split. What is the new par value per share? (Do not round intermediate calculations and round your final answer to 3 decimal places. (e.g., 32.16))
Hexagon declares a one-for-five reverse stock split. How many shares are outstanding now? (Do not round intermediate calculations.)
Hexagon declares a one-for-five reverse stock split. What is the new par value per share? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
The owners’ equity accounts for Hexagon International are shown here:
Explanation / Answer
Particulars
Amount
Common stock(0.50)
$40,000
Capital surplus
$335,000
Retained earnings
$738,120
Total owners equity
$1,113,120
Current Shares outstanding= $40,000/0.50=80,000 shares
a.New shares outstanding = Current shares outstanding x New shares/old shares
= 80,000 x (4/1) = 320,000
b. The equity accounts are unchanged except that the par value of the stock is changed by the ratio of old shares to new shares.
New par value = $0.50(1 / 4) = $.125 per share
c. New shares outstanding = Current shares outstanding x New shares/old shares
= 80,000 x (1/5) = 16,000
d.The equity accounts are unchanged except that the par value of the stock is changed by the ratio of old shares to new shares.
New par value = $0.50(5 / 1) = $ 2.50 per share
Particulars
Amount
Common stock(0.50)
$40,000
Capital surplus
$335,000
Retained earnings
$738,120
Total owners equity
$1,113,120