Problem:
Grullon Co. is considering a 9-for-5 stock split. The current stock price is $85.00 per share, and the firm believes that its total market value would increase by 7% as a result of the improved liquidity that should follow the split.
Required:
Question: What is the stock's expected price following the split?
A) $47.50
B) $48.00
C) $51.54
D) $50.53
E) $61.14
Note: Please show how you came up with the solution.