XYZ has 400,000 shares of common stock outstanding, a P/E ratio of 8, and $500,000 in net income. The board of directors has just voted in favor of a 3-for-2 stock split. You owned 100 shares before the stock split. What will be the total value of your investment after the split?

XYZ has 400,000 shares of common stock outstanding, a P/E ratio of 8, and $500,000 in net income. The board of directors has just voted in favor of a 3-for-2 stock split. You owned 100 shares before the stock split. What will be the total value of your investment after the split?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation

Section: Chapter Questions

Problem 9MC

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