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A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be a.10,000 shares. b.40,000 shares. c.160,000 shares. d.120,000 shares.

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Answer:

d. 120,000 shares.

Explanation:

In a stock split, the current number of shares outstanding is multiplied by the rate of the split and its par value is divided by the rate of the split.

In a 3-for-1 stock split with 40,000 shares outstanding originally, the new number of shares outstanding is:

[tex]n=40,000*3 =120,000\ shares[/tex]

There are 120,000 shares outstanding after the split.

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