Firm executing a 3-for-1 stock split


Question: If a firm executed a 3-for-1 stock split, you would expect that the value of:

a. an investment in the firm should increase because having 3 stocks is clearly better than 1.

b. each new stock should be approximately 3 times the value of the original stock

c. each new stock should be approximately equal to the value of the original stock

d. each new stock should be approximately one-third of the value of the original stock

e. all of the above would be essentially equally probable outcomes

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Accounting Basics: Firm executing a 3-for-1 stock split
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