You Own 100 Shares of Troll Brothers Stock, Which Currently

question 23

Multiple Choice

You own 100 shares of Troll Brothers stock, which currently sells for $120 a share. The company is contemplating a 2-for-1 stock split. Which of the following best describes what your position will be after such a split takes place?

• 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 50 shares of stock, and the stock will trade at or near $120 a share.
• D) You will have 50 shares of stock, and the stock will trade at or near $60 a share.

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Definitions:

Cash Operating Expenses

Expenses incurred during the normal course of business operations, including salaries, rent, and utilities, but excluding non-cash expenses like depreciation.

Technologically Obsolete

A state where a product or service is no longer considered useful or efficient due to advancements in technology.

Simple Rate Of Return

A financial metric that measures the incremental profit or savings from an investment as a percentage of the investment's initial cost.

Salvage Value

The estimated concluding value of an asset at the expiration of its functional life.