Examkin

Soru

Zorluk: OrtaSettlement Dates, Trade Confirmations, and Corporate Actions

An investor owns 600600 shares of ABC Corporation common stock, which is currently trading at a market price of $45.00\$45.00 per share. The corporation announces and executes a 55-for-44 forward stock split. What is the adjusted price per share of ABC Corporation common stock immediately following the split?

Cevap: 36 USD

Cevap

The post-split price per share is $36.00\$36.00.
In a 5-for-4 forward split, the total share count increases by 125%125\%, or a factor of 1.251.25 (5/4=1.255 / 4 = 1.25). To maintain the identical total market value of the position ($27,000\$27,000), the price per share must decrease proportionally by dividing the original price of $45.00\$45.00 by 1.251.25, resulting in $36.00\$36.00 per share.

Adım Adım Çözüm

1
Calculate the stock split factor
5 / 4 = 1.25
A 5-for-4 forward stock split means the investor receives 5 shares for every 4 shares previously held, increasing the share quantity by a ratio of 1.25.
2
Calculate the post-split share price
45.00/1.25=45.00 / 1.25 = 36.00
Corporate stock splits change share quantity and per-share market value proportionally so that total position value remains unchanged (600×$45.00=750×$36.00=$27,000600 \times \$45.00 = 750 \times \$36.00 = \$27,000).

Anahtar Kavram

Forward Stock Split Price Adjustment
Bu soruyu puanla

Konular

Settlement Dates, Trade Confirmations, and Corporate Actions