What is the most probable reason for stock splits?
A) The economic benefit for the firm
B) The increase in the number of shares where the price stays the same
C) Trading price at an acceptable level for small investors
D) Trading price at the penny stock level

Question

Quizplus · Accepted Answer

Stock splits are often done to make the trading price of a company's shares more affordable for small investors. By increasing the number of shares while keeping the price the same, the shares become more accessible to a wider range of investors. This can increase demand for the company's shares and may ultimately lead to higher prices.

What Is the Most Probable Reason for Stock Splits