Waec Model Questions Vol1 2021 Commerce Question 10

Practice objective / multiple choice question 10 from the 2021 Waec Model Questions Vol1 Commerce examination.

Waec Model Questions Vol1 2021 Commerce Objective / Multiple Choice Hard Difficulty
Question 10 WAEC_MODEL_QUESTIONS_VOL1 • 2021 • COMMERCE • objective

A company's share price over the last five trading days was: Day 1 ₦250, Day 2 ₦260, Day 3 ₦255, Day 4 ₦265, Day 5 ₦270. An investor bought 400 shares on Day 2 and 300 shares on Day 4. On Day 5 the company announced a 2‑for‑1 stock split, effective immediately, and the market price adjusted to exactly half of the pre‑split closing price. Calculate (a) the investor's total cost basis before the split, (b) the number of shares held after the split, (c) the market value of the holdings immediately after the split, and (d) the overall percentage gain or loss relative to the original cost basis.

Answer Options

A. Cost basis ₦185,000; shares after split 1,400; market value ₦189,000; gain ≈ 2.2%
B. Cost basis ₦183,500; shares after split 1,200; market value ₦162,000; gain ≈ -11.7%
C. Cost basis ₦183,500; shares after split 1,400; market value ₦196,000; gain ≈ 6.8%
Correct Answer D. Cost basis ₦183,500; shares after split 1,400; market value ₦189,000; gain ≈ 3.0%
Correct Answer
D
Correct Option:
Cost basis ₦183,500; shares after split 1,400; market value ₦189,000; gain ≈ 3.0%

About This Question

This is Waec Model Questions Vol1 2021 Commerce Question 10. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Commerce examination.

Difficulty level: Hard .

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