All Else Equal, a Normal Stock Split or a Stock

question 19

Multiple Choice

All else equal, a normal stock split or a stock dividend:

• A) results in a significant increase in the per share price of the stock.
• B) reduces the profits earned by a firm.
• C) increases the number of shares of stock outstanding.
• D) should not be recognized on the balance sheet of a corporation.
• E) increases the dividend per share.

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Definitions:

Nestlé

Nestlé is a multinational packaged foods and beverage company headquartered in Switzerland, known for its wide range of products including baby food, bottled water, coffee, dairy products, and more.

General Mills

An American multinational manufacturer and marketer of branded consumer foods sold through retail stores, known for products like cereals, snacks, and more.

Vertical Marketing Systems

A coordinated approach to distribution and marketing designed to ensure that products or services flow smoothly from the producer to the consumer with the involvement of various intermediaries.

Channel Economies

The cost savings and efficiency gains derived from using effective distribution channels to deliver products or services to consumers.