Paiva Corporation splits its common stock 2 for 1 when the market value is $80 per share. Prior to the split Paiva had 100000 shares of $10 par value common stock issued and outstanding. After the split the par value of the stock

A) remains the same.
B) is reduced to $2 per share.
C) is reduced to $5 per share.
D) is reduced to $20 per share.

Question

Asia Renee Suggs · Accepted Answer

Final Answer : C, Explanation :  When a stock splits, the par value per share is adjusted in proportion to the split ratio. In this case, a 2 for 1 split halves the par value from $10 to $5 per share.

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