Which of the Following Commonly Stated Reasons for Stock Splits

question 27

Multiple Choice

Which of the following commonly stated reasons for stock splits has the weakest empirical evidence in support?

• A)To remain at or return to a preferred trading range
• B)A signal to the market about expected continued strong performance
• C)Increased liquidity
• D)All of the above reasons have strong empirical evidence to support them.

---

Definitions:

Medicaid

A social healthcare program for individuals and families with low income and resources, primarily funded by the federal government and managed by the states in the U.S.

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s, aimed at restoring prosperity during the Great Depression.

Highest Quintile

The top 20 percent segment of a population when divided into five equal groups by a particular characteristic, such as income.

Total Income

The sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings received by a country or individual in a defined time period.