The purpose of a stock split is to
A) increase the dividend.
B) issue additional shares.
C) reduce trading activity.
D) reduce the price of stock.

Question

Quizplus · Accepted Answer

The purpose of a stock split is to reduce the price of stock, making it more affordable for investors to buy. This can attract more investors and increase trading activity. A stock split does not increase the dividend, though it may lead to a higher dividend yield. It also does not necessarily involve issuing additional shares, though the number of shares outstanding will increase due to the split.

The Purpose of a Stock Split Is to