The result of a stock split is:A. A larger number of more valuable shares. B. An increase in corporate assets. C. An increase in shareholders' equity. D. A larger number of less valuable shares.

Question

Sydnee Galloway

Business

7 November, 18:25

The result of a stock split is:A. A larger number of more valuable shares. B. An increase in corporate assets. C. An increase in shareholders' equity. D. A larger number of less valuable shares.

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Answers (1)

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Jaylen Stephenson · Answer 1

D. A larger number of less valuable shares.

Explanation:

A stock split occurs when a company perceives its price per share to be very expensive and therefore can conduct a 2:1 split to make each share to be equal to 2 shares but at a lower value. When this happens, investors who already hold stocks will have double the number of shares but each will be half the original price. Stock splits therefore makes it easier for small investors to buy a company stocks at an affordable price.