In a Stock Split or Stock Dividend, the Company Issues

question 43

True/False

In a stock split or stock dividend, the company issues additional shares rather than cash to its shareholders.

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Definitions:

CAPM

The Capital Asset Pricing Model, a model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Dividend Growth Model

A method for valuing a stock by using predicted dividends and discounting them back to present value.

Cost of Equity

The cost of equity is the return that a company is expected to pay to its shareholders for their investment in the company's equity.

Flotation Costs

Expenses incurred by a company when it issues new securities, including fees to underwriters, legal fees, and registration fees.