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:

Senior Citizen's Club

A social organization or recreational group specifically designed for the elderly to participate in activities and socialize.

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Practices and habits maintained by an individual to care for one's bodily health and well-being, through cleanliness.

Increased Appetite

A condition in which there is an abnormal rise in desire to eat; may be a symptom of mental or physical health issues or a side effect of medication.