In a Three-For-Two Stock Split for a Company That Previously

question 61

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 by 50%.

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Definitions:

Discovering Consumer Needs

The process of researching and understanding the requirements, desires, or problems of consumers to develop products or services that meet these needs.

New Products

Innovations or items that have been recently introduced to the market, offering fresh options to consumers.

Sales and Manufacturing

The process that involves both the creation of products and their sale to customers.

Target Market

A specific group of consumers at which a company aims its products and services.