A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $120. If the corporation issues a 2-for-1 stock split, the market value of the stock is expected to: a. $5
b. $60
c. $25
d. $24

B

Explanation:

A stock split is when a company increases the number of its shares outstanding by a constant proportion  

for example, if a company has 50,000 shares outstanding at a price of $25, earning per share is $1 and dividend per share is $2. this company announces a 2 for 1 split:  

the number of outstanding shares becomes 2 x 50,000 = 100,000  

stock price becomes = $25 / 2 =$12.5  

earnings per share = $1 / 2 = $0.50  

dividend per share = $2 / 2 = $1

Market value = $120 / 2 = 60

After a stock split, the price of the shares falls. so it can be used to adjust the market price of a stock so it falls within a preferred trading range.

A stock split doesn't affect the balances in shareholders equity account.  

Stock split doesn't affect the cash holdings of the firm.

the answer is i dont really know