SIE practice questionmediumStock Splits
A shareholder owns 100 shares at $60 each. After a 3-for-2 split, how many shares will the shareholder have and what will be the new share price (before market effects)?
- A66 shares at $90 each
- B150 shares at $40 each✓ Correct answer
- C200 shares at $30 each
- D100 shares at $90 each
Explanation
Why B — 150 shares at $40 each
A 3-for-2 split gives shareholders 3 shares for every 2 previously held. The investor's 100 shares become 150 shares, and the price adjusts proportionally from $60 to $40 before market effects.
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