The primary purpose of a stock split is to
A) indicate the firm's desire to retain funds.
B) increase the investor's overall wealth.
C) reduce the threat of a takeover by creating more shares.
D) bring the stock price to a lower trading range.

Question

Quizplus · Accepted Answer

The primary purpose of a stock split is to bring the stock price to a lower trading range, making the stock more affordable for investors and increasing liquidity. This is achieved by increasing the number of shares outstanding while proportionally decreasing the price per share.

The Primary Purpose of a Stock Split Is to