Idle Time Gaming Announced a 2 for 1 Common Stock

question 205

Multiple Choice

Idle Time Gaming announced a 2 for 1 common stock split for investors on record. Which of the following will occur?

• A)The stock price will increase to reflect the value of 2 shares for every one share.
• B)Each share will be worth ½ of its previous value, but shareholders total value of Idle Time Gaming will remain the same.
• C)The value of Idle Time common stock will remain the same, for a short period of time, and then experience a guaranteed growth spurt.
• D)The shareholders will immediately sell their shares immediately after the split and take their capital gains, as well as provide others an

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Definitions:

Store Manager

An individual responsible for overseeing the daily operations of a store, including personnel management, inventory control, and customer service.

Salary

A fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee.

Absorption Costing

A bookkeeping approach incorporating the total manufacturing expenses, which include the cost of direct materials, wages for labor directly involved in manufacturing, and all overheads, be they variable or fixed, into the product's cost.

Fixed Manufacturing Overhead

Costs associated with the production process that do not change with the level of output, such as rent, salaries, and utility expenses.