GB Inc Is Planning on Announcing a 4-For-1 Stock Split

question 74

Multiple Choice

GB Inc. is planning on announcing a 4-for-1 stock split. The stock is currently trading at $25 per share. Based on this information, what will be the new stock price?

• A) $6.25
• B) $25.00
• C) $31.25
• D) $100.00

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Definitions:

Taxable

Pertaining to financial income or transactions subject to taxation by government authorities.

Coupons

Fixed interest payments made by a bond issuer to its bondholders at specified intervals.

Zero-Coupon Bond

A bond that is issued at a discount and does not pay annual interest but is redeemed at its face value at maturity.

Deep Discount

The sale of an asset or product at a price significantly below its usual or intrinsic value.