Which of the Following Motivates Corporations to Split Their Common

question 117

Multiple Choice

Which of the following motivates corporations to split their common stock?

• A) To keep the price of the firm's common stock within an optimum price range
• B) To increase retained earnings
• C) To reallocate capital to shareholders
• D) To narrow ownership of the firm.

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Definitions:

Cash

Money in the form of currency, including bills and coins, that can be used to pay for goods and services.

Internal Control

Methods and systems put in place by an organization to guarantee the accuracy of financial and accounting data, encourage responsibility, and deter dishonest practices.

Voucher System

A method of accounting in which a record is kept for each transaction, detailing the necessary approvals and documentation.