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.

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Definitions:

Membership

denotes the state or condition of being a member of a group, organization, or society.

Direct Export Sale

A business transaction where goods are sold and shipped directly from the manufacturer in one country to a buyer in another country.

Buyer

The entity or individual that purchases goods or services for consumption or use.

Sovereign Immunity

A legal doctrine that prevents a sovereign state or governmental entity from being sued without its consent.