Igor Corp Declared a Two-For-One Stock Split

question 52

Multiple Choice

Igor Corp declared a two-for-one stock split. Tina Sother owned 500 shares of Igor that were trading for $20 each before the split. Which of the following is true?

• A) The total market value of Tina's shares will double.
• B) The market price per share will drop by 50%.
• C) The market price per share will increase by 100%.
• D) The number of shares Tina owns will increase by 50%.

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Definitions:

Main-Purpose Rule

A legal principle holding that if the main purpose of a guarantor's promise to pay another's debt is to serve the guarantor's own interests, the promise does not need to be in writing to be enforceable.

Secondary Obligation

An obligation that arises only after a primary obligation has not been fulfilled, often seen in guarantor or surety arrangements.

Statute of Frauds

A legal principle that requires certain contracts to be in writing and signed by the parties to be enforceable.

Prenuptial Agreements

Agreements made by a couple before they marry concerning the ownership of their respective assets should the marriage fail.