When a Firm Announces a Two-For-One Stock Split (In the Absence

question 104

Multiple Choice

When a firm announces a two-for-one stock split (in the absence of other new information) , investors should expect that:

• A)earnings per share will fall by half but stock price will remain the same.
• B)stock price will fall by half but earnings per share will remain the same.
• C)both earnings per share and stock price will remain the same.
• D)both earnings per share and stock price will fall by half.

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Definitions:

Projection

A defense mechanism where one attributes their own unacceptable thoughts, feelings, or motives onto another person.

Active Listening

A way of listening and responding to another person that improves mutual understanding, characterized by giving full attention and acknowledging the speaker's feelings.

Restating Content

Restating content is a communication technique that involves repeating or paraphrasing what another person has said to demonstrate understanding or clarify the message.

Self-Disclosure

The act of revealing personal information about oneself to others.