Trading, Accounts & Prohibited ActsQuestion 189 of 398
An investor owns 100 shares of a stock trading at $80 when the company declares a 2-for-1 forward stock split. After the split, what does the investor own?
a.50 shares worth $160 each
b.100 shares worth $40 each
c.200 shares worth $40 each
d.200 shares worth $80 each
Explanation
In a 2-for-1 forward split, share count doubles and price halves, leaving total market value unchanged. The investor now holds 200 shares at about $40 each, for the same $8,000 total value.
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