Which of the following is the most probable way in which a shareholder will benefit from a share split?
A) The immediately lower share price will attract enough increased interest in the share to cause the market price to increase on a more consistent basis.
B) The immediately higher number of shares that an investor owns immediately increases the investor's wealth.
C) The shareholder can use the immediately increased wealth to borrow more money to buy even more shares at the immediately lower market price.
D) A shareholder can lose money after a share split if the market believes that the split was an artificial way of attracting attention to a company that is not well managed.
Correct Answer:
Verified
Q75: If investors expect a 15% rate of
Q76: According to the Modigliani and Miller dividend
Q77: Dividend policy is important because of
A)costly transactions.
B)the
Q78: Which of the following typically would NOT
Q79: A firm's dividend payout decision has a
Q82: From the firm's point of view, a
Q84: Bonus share issues and share splits have
Q85: Artmarque's future earnings for the next four
Q86: Which of the following would influence a
Q97: A firm with high profitability will always
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents