Answer: Balance before Split - $67,500
After Split No. of shares - 10.8 billion
After Split Par Value - $0.00000625
After Split Balance - $67,500
Explanation:
Microsoft had 5.4b shares outstanding and par value was $0.0000125.
Before the split the balance in the Common Stock account was:
We will multiply the no. Of shares outstanding by the par value.
= 5.4 billion * $0.0000125
= $67,500
After the split shares outstanding are (in billions):
The split was a 2 for 1 split meaning the shares doubled. That would mean,
= 5.4b * 2
= 10.8 billion shares outstanding
After the split par value is:
It was a 2 for 1 split. That would mean that prices had to have halved. Calculating therefore,
= $0.0000125/2
= $0.00000625
After the split the balance in Common Stock is
= 10.8 billion shares * $0.00000625
= $67,500
Balance remained the same showing that total equity remains the same. Only no of shares and price changes.
Answer:
Before the split the balance in the Common Stock account was: $67,500
After the split shares outstanding are (in billions): 10.8
After the split par value is: $0.00000625
After the split the balance in Common Stock is $67,500
Explanation:
Stock split increase the numbers of shares with a specific given ratio but the common equity value remains same that's why the par value of the share decreases with respective ratio.
Before the split the balance in the Common Stock account was:
Common Stock = 5,400,000,000 shares x 0.0000125 = $67,500
After the split shares outstanding are (in billions):
2 for 1 split will double the Outstanding numbers of shares
Outstanding numbers of shares = 5.4b shares x 2/1 = 10.8b shares
After the split par value is:
Total value of stock remains same after the split
Par value = Total value / Â Outstanding numbers of shares after split
Par value = $67,500 / 10,800,000,000 = $0.00000625
After the split the balance in Common Stock is $"
Balance in the common stock will remain same as $67,500
