When a Company Declares a 2-For-1 Stock Split

question 192

Multiple Choice

When a company declares a 2-for-1 stock split,

• A)stockholders' equity is doubled.
• B)there is no effect on total stockholders' equity.
• C)a shareholder who previously held 100 shares will have 300 shares after the split.
• D)the price of each share will be one-third of what it was before the stock split.

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Definitions:

Fixed-Pie Bias

The misconception in negotiations that the 'pie' or total available benefit is fixed, leading to competitive rather than cooperative strategies.

Conflicts of Interest

Situations where an individual's or organization's private interests conflict with their professional duties or responsibilities, leading to potential bias or unethical decisions.

Intraorganizational Bargaining

The negotiating process within an organization aimed at resolving differences or aligning strategies between various stakeholders, such as management teams, departments, or divisions.

Constituency

The body of voters or supporters in a specified area who elect or back a representative, or the clients or customers served by an organization or institution.