The Mining Co

Multiple Choice

The Mining Co. has 110,000 shares of stock outstanding. The current market value of the firm is $5.5 million. The company has retained earnings of $1.8 million, paid in surplus of $2.2 million, and a common stock account value of $.11 million. The company is planning a 5-for-1 stock split. What will the retained earnings account value be after the split?

A) $0.36 million
B) $0.45 million
C) $1.8 million
D) $7.2 million
E) $9.0 million