Montedosa Corporation has 400,000 shares of common stock outstanding, a P/E ratio of 8, and P500,000 available for common shareholders. The board of directors has just voted a 3-2 stock split. a. If you have 100 shares of stock before the stock split, how many shares will you have after the split up? b. What was the total value of your investment in Montedosa stock before the split? c. What should be the total value of your investment in Montedosa stock after the split?

Montedosa Corporation has 400,000 shares of common stock outstanding, a P/E ratio of 8, and P500,000 available for common shareholders. The board of directors has just voted a 3-2 stock split. a. If you have 100 shares of stock before the stock split, how many shares will you have after the split up? b. What was the total value of your investment in Montedosa stock before the split? c. What should be the total value of your investment in Montedosa stock 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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