Game Guys Announced a 2-For-1 Common Stock Split for Investors

question 40

Multiple Choice

Game Guys 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 two shares for every one share.
• B) Each share will be worth ½ of its previous value, but shareholders' total value of Game Guys will remain the same.
• C) The value of Game Guys common stock will remain the same, for a short period of time, and then experience a guaranteed growth spurt.
• D) The shareholders will sell their shares immediately after the split and take their capital gains, as well as provide others an opportunity to invest in Game Guys.