A Two-For-One Stock Split Will Result In

question 122

Multiple Choice

A two-for-one stock split will result in:

• A)The firm acquiring new assets
• B)A decrease in the stock price, but an increase in shareholder wealth
• C)An increase in the stock price, and an increase in shareholder wealth
• D)A decrease in the stock price, and no change to shareholder wealth

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Definitions:

Target Firm

A company that is the focus of a takeover or acquisition attempt by another company.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Co-Owned Entity

A business or property ownership arrangement where two or more parties hold a share or interest.

Going-Private Transactions

Financial strategies where a company's outstanding shares are bought out to remove it from public stock exchanges, turning it into a privately held entity.