If you own 100 shares in a company that announces a 2-for-1 stock split (with no other announcement),you should
A) be happy because your investment has doubled.
B) be happy because you will be receiving cash from your investment as a result of the split.
C) be sad because the value of your investment will decline because of the split.
D) be indifferent because the overall value of your investment has not changed.

Question

Quizplus · Accepted Answer

A 2-for-1 stock split means that for every share you own, you get an additional share, doubling the number of shares you have. However, the price of each share is halved, so the total value of your investment remains the same.

If You Own 100 Shares in a Company That Announces