Mercury Homes Just Declared a 4-For 3 Stock Split

question 76

Multiple Choice

Mercury Homes just declared a 4-for 3 stock split. Which of the following occurred as a result of this split? I. number of shares outstanding increased by 1/3
II) number of shares outstanding decreased by 1/4
III) price per share increased by 1/3
IV) price per share decreased by 1/4

• A) I only
• B) I and III only
• C) I and IV only
• D) II and III only
• E) II and IV only

---

Definitions:

Compounded Monthly

Involves calculating and adding interest to the principal amount of an investment or loan on a monthly basis.

Deferred Annuity

An annuity where the start of the periodic payments is delayed by more than one payment interval.

Compounded Annually

The process where interest is calculated once per year and added to the principal sum, affecting the total amount and future interest calculations.

Lump Amount

A single payment made at a particular time, as opposed to several smaller payments or installments.