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Kelly Owns 10,000 Shares in McCormick Spices,which Currently Has 500,000

Question 138

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Kelly owns 10,000 shares in McCormick Spices,which currently has 500,000 shares outstanding.The stock sells for $86 on the open market.McCormick's management has decided on a two-for-one split. a.Will Kelly's financial position change after the split,assuming that the stock's price will fall proportionately? Kelly owns 10,000 shares in McCormick Spices,which currently has 500,000 shares outstanding.The stock sells for $86 on the open market.McCormick's management has decided on a two-for-one split. a.Will Kelly's financial position change after the split,assuming that the stock's price will fall proportionately? b.Assuming only a 35% decrease in the stock price,what will be Kelly's value after the split? b.Assuming only a 35% decrease in the stock price,what will be Kelly's value after the split?

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