When a Firm Announces a Two-For-One Stock Split (In the Absence

question 48

Multiple Choice

When a firm announces a two-for-one stock split (in the absence of other new information) , investors should expect that:

• A) the earnings per share will decrease by 50% but the stock price will remain constant.
• B) the stock price will decrease by 50% but earnings per share will remain constant.
• C) both the earnings per share and the stock price will remain the same.
• D)both earnings per share and the stock price will decrease by 50%.

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Definitions:

Rights

Legal, social, or ethical principles of freedom or entitlement; the fundamental norms concerning what people are allowed to do.

Company

A legal entity formed by a group of individuals to engage in and operate a business commercially or industrially.

Technological Innovation

The introduction of new technologies or the improvement of existing technologies to create new products, services, or processes.

Cloud Source LLC

Assuming it’s a real entity, it would refer to a company specializing in providing cloud-based solutions and services. If not, then NO.