Trimble Navigation Executes a 2:1 Stock Split

The early morning headline read: "Trimble Navigation splits before market open today (2:1 ratio)." Note: "today" was 23 February 2007.

TRMB closed yesterday (2007.02.22) at $56.09 per share.

  1. Explain what is meant by a 2:1 stock split.

  2. On 22 February 2007 Zelmo went to bed owning 22 TRMB shares and he woke up the next day owning _______ TRMB shares.

  3. Explain what the effect would be if a company implements a reverse stock split.

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Creator: Gerald D. Thurman []
Created: 23 February 2007

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