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Homework answers / question archive / Suppose you own 1,000 common shares of CIBC
Suppose you own 1,000 common shares of CIBC. The earnings per share is $6.00, the Dividend per share is $3.00, and the stock sells for $90 per share. CIBC announces a 3-for-1 stock split. Immediately after the split, how many shares will you have, what will be the new Earnings per Share, Dividend per share, and the expected stock price immediately after the split?
3 for 1 a stock split will mean that the investors overall holding of this talk will be tripling.
Total number of shares=[1000*3]= 3000 shares.
New Earning per share= (old earning/ split)= (6/3)= 2 per share
Dividend per share= (3/3)= 1 per share
New price per share= (90/3)= $30 per share
