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

question 108

Multiple Choice

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

• A) earnings per share will fall in half but stock price will remain the same.
• B) stock price will fall in half but earnings per share will remain the same.
• C) both earnings per share and stock price will remain the same.
• D) both earnings per share and stock price will fall by half.