Approximate value of sunshine investment


Beam Company currently has 100,000 shares of common stock outstanding and a price-earnings ratio of seven. Net income for the recently ended year is $375,000. Beam's board of directors declared a 15-for-2 stock split. Sunshine owned 100 shares of Beam before the split. What is the approximate value of Sunshine's investment in Beam immediately after the split?

a. $ 26

b. $ 350

c. $2,625

d. $5,250

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Accounting Basics: Approximate value of sunshine investment
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