Trading, Accounts & Prohibited ActsQuestion 226 of 398
An investor buys 100 shares at $60 (total cost $6,000). The stock later does a 3-for-1 forward split. What are the investor's new share count and adjusted cost basis per share?
a.100 shares at $180 per share
b.33 shares at $60 per share
c.100 shares at $20 per share
d.300 shares at $20 per share
Explanation
A 3-for-1 split triples the shares to 300 and divides the price and per-share basis by three, from $60 to $20. Total cost basis remains $6,000 (300 shares x $20), so the split does not change the investor's total economic value.
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