A Two-For-One Stock Split Results in a Doubling of the Number

question 124

True/False

A two-for-one stock split results in a doubling of the number of outstanding shares,but they do not affect the company's assets,profits,or total value.

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Definitions:

Normal Good

A good or service whose consumption increases when income increases and falls when income decreases, price remaining constant.

Marginal Utility

Marginal utility is the additional satisfaction or benefit received by consuming one more unit of a good or service, often decreasing as consumption increases.

Reallocating Expenditures

The process of adjusting how money is spent across different goods, services, or categories to optimize outcomes or achieve desired objectives.

Substitution Effect

(1) A change in the quantity demanded of a consumer good that results from a change in its relative expensiveness caused by a change in the good’s own price. (2) The reduction in the quantity demanded of the second of a pair of substitute resources that occurs when the price of the first resource falls and causes firms that employ both resources to switch to using more of the first resource (whose price has fallen) and less of the second resource (whose price has remained the same).