Which of the Following Statements Is Not True About a 2-For-1

question 19

Multiple Choice

Which of the following statements is not true about a 2-for-1 stock split?

• A)Total contributed capital increases.
• B)Par value per share is reduced to half of what it was before the split.
• C)A stockholder with ten shares before the split owns twenty shares after the split.
• D)The market price probably will decrease.

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Definitions:

Unexpected Expenditures

Expenses that were not planned or budgeted for, often requiring immediate payment.

Risk-Averse

A description of an investor or decision-maker who prefers to minimize uncertainty or potential loss, favoring safer over riskier options.

Financial Intermediary

An institution that acts as a middleman between savers and borrowers, including banks, investment companies, and insurance companies.

Borrowing Funds

The act of obtaining resources, typically money, from another party with the agreement to return the principal amount along with interest or other charges.