Why Does a Company Split Its Stock

question 69

Multiple Choice

Why does a company split its stock?

• A) The stock is trading at a low price, and the company wants to increase its stock value.
• B) It wants fewer shares outstanding.
• C) The stock is trading at a high price, and the company wants to bring the price in line with a theoretical ideal range.
• D) It wants the total market capitalization to be lower than the current level.
• E) The company wants to guarantee that the stock price will increase.

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Definitions:

Therapeutic Technique

A specific process or intervention used in therapy to help individuals cope with or overcome psychological, emotional, or behavioral issues.

Psychotherapist

A professionally trained individual who uses psychological methods and techniques to help people manage and overcome mental health issues, emotional challenges, and personal problems.

Catharsis Hypothesis

The idea that expressing or venting emotions allows an individual to release negative feelings and achieve a state of psychological well-being.

Ex-boyfriend

A term used to describe a person's former male partner in a romantic relationship.