Which of the Following Statements Is Correct About Investors in Ajax

question 110

Multiple Choice

Which of the following statements is correct about investors in Ajax Industries,which has just announced a three-for-one stock split?

• A) Investors will triple their wealth after the split.
• B) Investors' wealth will fall by two-thirds after the split.
• C) Percentage of ownership increases for the investors.
• D) Earnings per share will fall by two-thirds after the split.

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Definitions:

Personal Income Tax

A tax levied on individuals or households based on the level of their income.

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government, after deductions and exemptions.

Marginal Tax Rate

It is the rate at which the last dollar of income is taxed, reflecting the percentage of tax applied to your income for each tax bracket in which you qualify.

Taxable Income

The amount of income subject to taxes, after all deductions and exemptions are taken into account.