A shareholder owns 200 shares of stock XYZ at $58 each. If there is a 2-1 stock split, how many shares will the shareholder have, and what will the new share price be?

A shareholder owns 200 shares of stock XYZ at $58 each. If there is a 2-1 stock split, how many shares will the shareholder have, and what will the new share price be?

• A. 400 shares at $29 per share
• B. 200 shares at $58 per share
• C. 800 shares at $29 per share
• D. 400 shares at $58 per share

Answer: (A)

In a 2-for-1 stock split, the number of shares doubles and the price per share halves, leaving the total value roughly the same. Starting with 200 shares at $58, doubling the shares gives 400 shares. The price per share halves: $58 ÷ 2 = $29. So you end up with 400 shares priced at $29 each, preserving the overall value (200 × 58 equals 400 × 29). Other options don’t fit the 2-for-1 rule: keeping 200 shares at $58 means no split occurred; 800 shares at $29 would require a larger split than 2-for-1; 400 shares at $58 would mean the price didn’t adjust after the split.

In a 2-for-1 stock split, the number of shares doubles and the price per share halves, leaving the total value roughly the same.

Starting with 200 shares at $58, doubling the shares gives 400 shares. The price per share halves: $58 ÷ 2 = $29. So you end up with 400 shares priced at $29 each, preserving the overall value (200 × 58 equals 400 × 29).

Other options don’t fit the 2-for-1 rule: keeping 200 shares at $58 means no split occurred; 800 shares at $29 would require a larger split than 2-for-1; 400 shares at $58 would mean the price didn’t adjust after the split.