You Own 100 Shares of Troll Brothers' Stock,which Currently Sells

question 27

Multiple Choice

You own 100 shares of Troll Brothers' stock,which currently sells for $120 a share.The company is about to declare a 2-for-1 stock split.Which of the following best describes your likely position after the split?

• A) You will have 200 shares of stock,and the stock will trade at or near $120 a share.
• B) You will have 200 shares of stock,and the stock will trade at or near $60 a share.
• C) You will have 100 shares of stock,and the stock will trade at or near $60 a share.
• D) You will have 50 shares of stock,and the stock will trade at or near $120 a share.
• E) You will have 50 shares of stock,and the stock will trade at or near $600 a share.

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Definitions:

Cost of Goods Manufactured

The total cost of all materials, labor, and manufacturing overhead used in producing finished goods over a specific period.

Flexible Budgeting

A budgeting process that adjusts for changes in the volume of activity, rather than remaining static.

Direct Labor

The wages and related benefits of employees who are directly involved in the production of goods or the delivery of services.

Direct Materials

Raw materials that are directly incorporated into a finished product and are easily traceable to specific goods or services.