Anatoliy had purchased five shares of stock with a par value of $20 last year. At a financial review, his advisor tells Anatoliy that he now owns 10 shares of stock with a par value of $10. What has most likely occurred in this situation?
A) The company completed a stock split.
B) The company finalized a diversification.
C) The company received a limit order.
D) The company increased its market value.
E) The company approved a dividend payout.

Question

Quizplus · Accepted Answer

The company likely completed a stock split, which is when a company divides its existing shares into multiple shares to boost the liquidity of the shares. In Anatoliy's case, his 5 shares with a par value of $20 each were split into 10 shares with a new par value of $10 each, keeping the total value the same but increasing the number of shares.

Anatoliy Had Purchased Five Shares of Stock with a Par