Global Financial Corporation (GFC) has 10 million shares outstanding, each currently worth $80 per share. The firmAc€?cs mangers are considering a plan to split the companyAc€?cs stock 2-for-1, but they are concerned about the impact this split announcement will have on the firmAc€?cs stock price. a. If GFCAc€?cs mangers announce a 2-for-1 stock split, what exactly will the company do, and what will GFCAc€?cs stock price likely be after the split?
b. How many total shares of GFC stock will be outstanding after the split?
c. If GFCAc€?cs mangers believe that the ideal stock price for the firmAc€?cs shares is $20 per share, what should they do? How many shares would be outstanding after this action?
d. Why do you think GFCAc€?cs managers are considering a stock split?
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