All Else Equal, a "Normal" Stock Split

question 28

Multiple Choice

All else equal, a "normal" stock split

• A)generally results in a significant increase in the per share price of the stock from what it was before the split.
• B)reduces the number of shares of stock outstanding.
• C)increases the number of shares of stock outstanding.
• D)does not need to be recognized in any way on the balance sheet of a corporation.
• E)increase the dividend per share.

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Definitions:

Income Elasticity

A measure of how much the quantity demanded of a good responds to a change in consumers' income.

Mobile Service

A service provided by telecommunications companies that allows for voice, text, and data communication over mobile devices.

Midpoint Method

A technique used in economics for calculating elasticity by taking the average of the starting and ending prices and quantities to find a percentage change.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, reflecting the product's sensitivity to price changes.