Question

Help. :(

Answer 1

You owns 51 shares in Western World Stock. Today, they announed they were having a 5 for 3 split, and closing price was $23. 50.
a) How many shares of stock do you own post split?
b) How much money was one share of stock worth post split?
c) Because you have a "partial" share, or a "fractional" share, the company required to buy those from you, and send a check. How much will the check be?

Answer 2

a) 51 * 5/3 = 85 shares
b) 23.50
Explain part c a little more

Answer 3

Part C is same question on my textbook. :/

Answer 4

@ajmayberry

Answer 5

a) is right

Answer 6

Are you saying you didn't agree with b)? Or is it because c) wasn't answered?

Answer 7

Yes, both. :P

Answer 8

I thought b) is 23.5 x 3/5 is 14.1

Answer 9

c) is really confusing.

Answer 10

for b) I'm kind of inclined to agree with their answer because it says "close" price is $23.50. Do you know the definition of close?

Answer 11

Ohhh. I can see that.

Answer 12

I'm actually asking you, since I'm not sure what it means. Let me do a bit of reading. Btw is it getting too late at night?

Answer 13

>.<

Answer 14

Ok I just read another important thing.

Answer 15

Say you have 100 shares and each share is $10.

Answer 16

If you do a 2 for 1 split, you have to multiply the split as is (2/1) to the shares. But the share price actually gets divided by it. So it would be 200 shares and $5 per share.

Answer 17

When you take a class like this, you need to make a cheat sheet (a concise note page) with those important concepts.
x for y split, multiply it by # of shares, divide it into price of 1 share. So in the previous problem I helped you with a) and d) were wrong.

Answer 18

I see.

Answer 19

your b) is right

Answer 20

$14.1

Answer 21

Yay. :3

Answer 22

So c) is .5 times 14.1 is 7.05 so the check will be 7.05

Answer 23

That would be right if you actually had a fractional share.

Answer 24

85 shares is not fractional

Answer 25

I'm trying to figure out the mistake. The only other option I can see right now is it is supposed to be 51*3/5 = 30.6 shares. But that doesn't agree with what I've learned

Answer 26

Do you understand what a fractional share is?

Answer 27

Not really. ;/

Answer 28

Think of the shares as apples. If you had 51 apples and you did a 5 for 3 split. You would have 85 apples right? Now what if it was a 3 for 5 split? You would instead have 30 apples and .6 of another apple. That is a fraction or partial. Because it's not a whole apple (in the apple analogy).

Answer 29

Does that make sense?

Answer 30

Mhm. I understand.

Answer 31

if a) is correct. You don't actually have a partial share then.

Answer 32

Did you copy it down from your book correctly?

Answer 33

Yes, I did. ;/

Answer 34

Well, I guess I don't have partial share.

Answer 35

Yeah

Answer 36

Sorry. I have to do my homework too. I will think about your question and come back if I have anything else for you. Make sure you understand what a traditional stock split is vs a reversible stock split is.

Answer 37

Okay. Thank you for helping me. You are my lifesaver. (:

Answer 38

no problem. good luck