A Company's Current Equity Value Is $2 Million

question 38

Multiple Choice

A company's current equity value is $2 million. If the company splits the stock 2 for 1, the equityvalue will

• A) fall to $1 million.
• B) increase to $4 million.
• C) increase to $4 million for about a week and fall back to normal levels.
• D) remain unchanged at $2 million.