Stock splits are a sign that the company ______.
A) is in need of more financial capital
B) has set its stock price too low
C) wants to get its stock price to a more desirable trading level
D) cannot pay its stock dividend

Question

Quizplus · Accepted Answer

Stock splits are typically done to make a company's stock more affordable and attractive to investors. By increasing the number of shares outstanding and decreasing the price per share, the stock becomes more accessible to a wider range of investors. Companies often do this to get their stock price to a more desirable trading level, which could improve liquidity and increase demand for the stock.

Stock Splits Are a Sign That the Company ______