The Main Purpose of a Stock Split Is to

question 22

Multiple Choice

The main purpose of a stock split is to

• A) decrease the marketability of the stock by increasing the price.
• B) increase the marketability of the stock by increasing the price.
• C) increase the marketability of the stock by decreasing the price.
• D) reduce the number of issued shares.

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Definitions:

Mental Shortcuts

Cognitive strategies or heuristics that simplify decision making by using limited information, allowing for faster judgements but sometimes at the cost of accuracy.

Self-Serving Bias

A cognitive bias that involves individuals attributing their successes to internal factors while attributing failures to external factors.

Information Presentation

The method or format in which information is organized and provided to an audience or users.

Disconfirmatory Information

Information or evidence that contradicts or refutes one's beliefs or assumptions.