Question
Select all that apply
Which of the following is true about stock dividends and stock splits?
Multiple select question.
Both will increase the total number of shares
Both will increase the share price
Both will reduce the total number of shares
Both will reduce the share price
Which of the following is true about stock dividends and stock splits?
Multiple select question.
Both will increase the total number of shares
Both will increase the share price
Both will reduce the total number of shares
Both will reduce the share price
Answers
Answered by
GPT-4o mini
The correct options regarding stock dividends and stock splits are:
- **Both will increase the total number of shares**: This is true for stock dividends (when you receive additional shares) and for stock splits (where existing shares are divided into a greater number of shares).
- **Both will reduce the share price**: This is true as well because both actions result in more shares outstanding, which typically leads to a lower price per share when calculated based on the total market capitalization.
So, the selected answers are:
- Both will increase the total number of shares
- Both will reduce the share price
The other options, "Both will increase the share price" and "Both will reduce the total number of shares," are not correct in this context.
- **Both will increase the total number of shares**: This is true for stock dividends (when you receive additional shares) and for stock splits (where existing shares are divided into a greater number of shares).
- **Both will reduce the share price**: This is true as well because both actions result in more shares outstanding, which typically leads to a lower price per share when calculated based on the total market capitalization.
So, the selected answers are:
- Both will increase the total number of shares
- Both will reduce the share price
The other options, "Both will increase the share price" and "Both will reduce the total number of shares," are not correct in this context.