60,000 shares
$60 per share
After the split, how many shares of stock will be outstanding? Common Stock Outstanding?
What will be the approximate market price per share?
$60 per share
So, to calculate the number of shares outstanding after the split, we can use the formula:
Number of shares after split = Number of shares before split * Split ratio
Number of shares after split = 30,000 shares * (2 shares / 1 share) = 60,000 shares
Thus, after the 2-for-1 stock split, there will be 60,000 shares of stock outstanding.
Now, to estimate the approximate market price per share after the split, we need to consider the effect of the split on the total market value of the company. The total market value is determined by multiplying the number of shares by the market price per share.
Before the split:
Number of shares = 30,000 shares
Market price per share = $120
Total market value before the split = Number of shares * Market price per share
= 30,000 shares * $120 = $3,600,000
Since the total market value of the company remains the same after the split, we can use this information to estimate the market price per share after the split.
After the split:
Number of shares = 60,000 shares (as calculated above)
Market price per share after the split = Total market value before the split / Number of shares after the split
= $3,600,000 / 60,000 shares
= $60
Therefore, after the 2-for-1 stock split, the approximate market price per share will be $60.