jwmiciche7298 jwmiciche7298
  • 12-08-2020
  • Business
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Ballpark has shares of par common stock outstanding. Ballpark announces a stock split of for1. What is the effect of the​ split?

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tutordamola
tutordamola tutordamola
  • 14-08-2020

Answer:

The answer is 'it increases the number of shares outstanding'

Explanation:

Stock split increases the number of shares outstanding. It causes dilution of earnings per share.

For example, ABC Inc. has 50,000 shares outstanding and it announces a stock split of 3-for- 1.

This means that any shareholder that has 1 will exchange that 1 share for 3 shares. So at the end of the stock split the total number of shares outstanding will be 150,000 shares (50,000 x 3)

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