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.

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Definitions:

Withdrawal Distress

The physical and emotional symptoms experienced after discontinuing the use of an addictive substance.

Heroin Addicts

Individuals who suffer from addiction to heroin, a highly addictive opioid drug, often facing significant physical, psychological, and social consequences.

Euphoria

A feeling or state of intense excitement and happiness.

Euphoric Feeling

A profound sense of well-being, happiness, and excitement, often transient and sometimes resulting from drug use, achievements, or intense joy.