Which of the Following Are Realistic Motives for a Stock

question 106

Multiple Choice

Which of the following are realistic motives for a stock split?

• A)To increase the number of shares because successful companies have large numbers of shares outstanding.
• B)To reduce the stock's price to keep it in a desirable trading range.
• C)To immediately increase the market value of the firm's stock.
• D)a and b

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Definitions:

Defective Corporation

A corporation whose incorporation process included an error or omission.

Corporate Status

A legal status that allows a company to operate as its own legal entity, separate from its owners.

Charitable Donations

Voluntary contributions made to nonprofit organizations or causes without expectation of receiving something in return.

Closely Held Corporations

Corporations that have a small group of shareholders with no market for buying or selling company stock. They often involve family businesses.