Stock Splits Can Be Used To

question 26

Multiple Choice

Stock splits can be used to:

• A) adjust the market price of a stock so it falls within a preferred trading range.
• B) decrease a company's excess cash thereby lowering agency costs.
• C) increase the par value per share while decreasing the market price per share.
• D) increase the total equity of a firm.
• E) adjust the debt-equity ratio to its preferred level.

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Definitions:

Contingency

A future event or circumstance that is possible but cannot be predicted with certainty.

Employee Needs

include the various psychological and physical requirements that must be met to ensure satisfaction and productivity of workers.

Behavioral Approach

A perspective in management and psychology focusing on the effects of individual and group behavior on organizational performance and efficiency.

Systems Approach

A method of problem solving or analysis that views problems as parts of an overall system, rather than focusing on individual components.