Rosa Corporation's board of directors is concerned about the market price of each share of stock.They believe that the shares would be more marketable if the market price was closer to $18 a share.They should initiate a ____ split.

Question

Quizplus · Accepted Answer

A two-for-one stock split would effectively double the number of shares outstanding while cutting the price in half. This would make the stock more affordable and potentially more attractive to investors, thus potentially increasing demand and driving up the price per share. A three-for-one split may be more drastic than necessary, and a reverse stock split would have the opposite effect, decreasing the number of shares outstanding and increasing the price per share, but potentially making the stock less accessible and attractive to investors.

Rosa Corporation's Board of Directors Is Concerned About the Market