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two-for-one stock split

Which of the following is correct regarding a two-for-one stock split?

a. The purpose of the split may be to decrease the value per share of the stock.

b. The purpose of the split is to make a distribution to the stockholders.

c. After the split, each stockholder will have a greater ownership interest in the corporation.

d. The value of each share of stock will increase as a result of the split.

Solution Preview

Which of the following is correct regarding a two-for-one stock split?

a. The purpose of the split may be to decrease the value per share of the stock.

When a company believes that investors are shying away from purchasing or holding its stock because the market price is too high ...

Solution Summary

A two-for-one stock split is explained.

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