What is a "stock split"?
A)It is an increase in the number of shares issued for which book value consideration is received from investors.
B)It is an increase in the number of shares issued for which no consideration is received from investors.
C)It is an increase in the number of shares issued for which par value consideration is received from investors.
D)It is an increase in the number of shares issued for which market value consideration is received from investors.

Question

Quizplus · Accepted Answer

A stock split is an increase in the number of shares issued for which no consideration is received from investors. The purpose of a stock split is to make the shares more affordable and increase liquidity. For example, if a company has 100 shares priced at $100 each, a 2-for-1 stock split would result in the company having 200 shares priced at $50 each. No new money is raised, but the existing shareholders now have more shares at a lower price.

What Is a "Stock Split