In a Three for Two Stock Split for a Company

question 106

Multiple Choice

In a three for two stock split for a company that previously had 1 million shares outstanding selling at $100 per share and a total market value of $100 million, which of the following is true:

• A)The number of outstanding shares will drop to 666,666, and the stock price will increase to $150
• B)The number of outstanding shares will increase to 1.5 million, and the stock price will drop to $66.67
• C)The number of outstanding shares will increase to 1.5 million, and the stock price will rise to $133.33
• D)The market value of the firm will increase 1 million shares x (.15) = 1.5 million
• Since total market value does not change:

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Definitions:

Cross-lagged

A statistical technique used in time series analysis to determine the relationship between variables at different points in time.

Cohort

A group of subjects who share a defining characteristic, often studied over a period of time to observe changes and outcomes.

Demographic Question

A demographic question seeks information about the characteristics of respondents, such as age, gender, ethnicity, or income, often used in research to analyze trends within specific population segments.