Tamara owns 595 shares of stock in a home appliance company. The value of the stocks is $12.75 per share. The company offers a 5:1 stock split.
How many shares does Tamara own of the company after the stock split?
2975 I think
First, let's calculate the total number of shares Tamara owns before the stock split.
Tamara owns 595 shares.
Now, let's calculate the number of shares after the stock split.
A 5:1 stock split means that for every 1 share owned, the shareholder receives 5 additional shares.
Therefore, after the stock split, the number of shares Tamara owns will be:
595 shares x 5 = 2975 shares.
Therefore, Tamara will own 2975 shares of the company after the stock split.
To determine how many shares Tamara owns after the stock split, we need to multiply the number of original shares by the split ratio. In this case, the stock split ratio is 5:1, which means for every 1 share Tamara currently owns, she will receive 5 new shares.
Since Tamara owns 595 shares, we can calculate the number of shares she will own after the stock split using the formula:
Number of new shares = Number of original shares * Split ratio
Number of new shares = 595 shares * (5:1)
Let's simplify the calculation:
Number of new shares = 595 shares * 5
Number of new shares = 2975
Therefore, Tamara will own 2975 shares of the company after the stock split.
5:1 means 5 times as many shares, each worth 1/5 as much.
The net worth of the company has not changed.