If a Company Announces a Stock Split, the Investor May

question 157

True/False

If a company announces a stock split, the investor may receive two or more shares of the company stock, for every one share that he/she holds.

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset, which spreads the cost of the asset evenly over its useful life.

Bond Premium

The amount by which the market price of a bond exceeds its principal amount or face value.

Discount on Bonds Payable

The gap between a bond's face value and its market selling price, occurring when the bond sells below its nominal value.

Straight-Line Amortization

A method of reducing the carrying amount of an intangible asset over its useful life in equal amounts.