Ironhaus Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Southwest. Ironhaus Restaurant Corporation, which had 40,000 shares of common stock outstanding, declared a 4-for-1 stock split.
a. What will be the number of shares outstanding after the split?
b. If the common stock had a market price of $300 per share before the stock split, what would be an approximate market price per share after the split?
Answer:
a. 160,000 shares (40,000 × 4)
b. $75 per share ($300 ÷ 4)