Even If a Stock Split Has No Information Content, and Even

question 46

True/False

Even if a stock split has no information content, and even if the dividend per share adjusted for the split is not increased, there can still be a real benefit (i.e., a higher value for shareholders) from such a split, but any such benefit is probably small.

Recognize the role and significance of financial intermediaries in the financial system.

Understand the concept of investment term and maturity and the implications for financing.

Identify the key differences between money markets and capital markets.

Understand the process and significance of indirect and direct transfers in financial markets.

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Definitions:

Monitoring

The process of systematically observing, checking, and recording activities or data to ensure standards are met or progress is being made.

Moral Hazard

The situation where one party is more likely to take risks because they do not bear the full consequences of their actions.

Shirking

Avoiding or neglecting duties, responsibilities, or work, often covertly, to reduce personal effort while still receiving compensations or benefits.

Working Diligently

Refers to the act of putting consistent and earnest effort into one's tasks or duties.