Share Splits Are Conducted Because It Is Believed That

question 11

Multiple Choice

Share splits are conducted because it is believed that:

• A) Excess capital leads to reduced return ratios, which the market does not view favourably.
• B) Increasing the number of shares issued makes the company appear larger and more stable.
• C) Decreasing the price per share makes them more marketable.
• D) Investors view this as a bonus because they now have more shares than they previously held.
• E) None of the given answers.

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Definitions:

Catharsis

The act of liberating oneself from intense or suppressed feelings, thus achieving emotional relief.

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A sudden discharge of electricity through a part of the body, often used in psychological experiments to study learning or as a form of aversion therapy.

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