Understanding Stock Splits

What happens to the total value of a company's shares after a conventional stock split?

• It decreases.

• It increases.

• It becomes unpredictable.

• It remains the same.

Why might a company decide to split its stock?

• To reduce the number of shares.

• To increase the stock price.

• To decrease market liquidity.

• To make shares more affordable for investors.

If you own a stock that splits, what happens to the total value of your shares?

• It increases.

• It becomes unpredictable.

• It decreases.

• It remains the same.

What is a reverse stock split?

• A process where a company merges with another company.

• A process where a company issues new shares to the public.

• A process where a company decreases its number of shares to increase the price per share.

• A process where a company increases its number of shares.

Why might a company perform a reverse stock split?

• To attract more investors by lowering the share price.

• To meet exchange listing requirements.

• To decrease the stock price.

• To increase the number of shares.