Which of the Following Statements Is not True About a 2-For-1

question 24

Multiple Choice

Which of the following statements is not true about a 2-for-1 split?

• A)Par value per share is reduced to half of what it was before the split.
• B)Total contributed capital increases.
• C)The market price probably will decrease.
• D)A stockholder with ten shares before the split owns twenty shares after the split.

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Definitions:

Effective Annual Rate

The annualized rate of interest on a loan or financial product, adjusted for the effects of compounding.

Continuous Compounding

A mathematical approach where interest earnings are immediately reinvested to generate additional earnings continuously.

Stated Rate

The annual interest rate stated on a financial instrument, such as a loan or bond, not adjusting for compounding or fees.

Interest-Only Loan

A loan where the borrower is required to pay only the interest on the principal balance for a set period of time.