Which of the Following Statements About Stock Splits Is Correct

question 121

Multiple Choice

Which of the following statements about stock splits is correct?

• A) If a company has a 2-for-1 split, the price will be doubled.
• B) If a company has a 3-for-1 split, the price will increase by a factor of 3.
• C) If a company has a 4-for-1 split, the new number of shares will be four times as many as before the split.
• D) If a company has a 5-for-1 split, the new number of shares will be equal to the old number of shares divided by 5.
• E) None of these is correct.

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Definitions:

Rumor Mill

The rumor mill refers to the informal transmission of unverified information or gossip, often spreading quickly through a community or organization.

Formal Communication Network

The officially sanctioned channels for information and message flow within an organization.

Communication Path

The route through which a message travels from sender to receiver, which can be direct or indirect.

Leadership

The ability to guide, influence, or direct a group towards achieving a common goal.