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Gerald owns 465 shares of stock, with a basis of $2,831. The stock split 3 for 1. Gerald now owns ______ shares at ______ per share.

Sagot :

jepessoa

Answer:

Gerald now owns 1,395 shares at $2.03 per share.

Explanation:

Gerald originally owned 465 stocks, but after the stock split he will own 465 x 3 = 1,395 stocks. His basis though will not change, it will be the same $2,831. So the basis per share = $2,831 / 1,395 stocks = $2.029 ≈ $2.03 per stock. Stock splits do not alter the basis of a portfolio, it only increases the total number of stocks.

The amount of shares Gerald now owns is 1,395 shares and the price per share is $2.03.

When there is a stock split, the number of stock outstanding is increased by a constant number. When there is a stock split 3 for 1, for every 1 stock a shareholder owns, the shareholder now owns 3 stocks.

Number of shares owned = 465 x 3 = 1,395 shares

When there is a stock split, the value of the stock declines per share.

Value per share = $2831 / 1395 = $2.03

To learn more about stock splits, please check: https://brainly.com/question/25513890

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