Which of the following statements is correct about investors in Ajax Industries,which has just announced a three-for-one stock split?
A) Investors will triple their wealth after the split.
B) Investors' wealth will fall by two-thirds after the split.
C) Percentage of ownership increases for the investors.
D) Earnings per share will fall by two-thirds after the split.

Question

Quizplus · Accepted Answer

A three-for-one stock split increases the number of shares, reducing the earnings per share by two-thirds, but it does not change the total wealth or ownership percentage of investors.

Which of the Following Statements Is Correct About Investors in Ajax