Which of the following is a good analogy for a stock split?

A.
Getting a pay bonus at your job

B.
Buying something on sale

C.
Paying a premium for something you want

D.
Exchanging money

1 answer

The best analogy for a stock split is:

B. Buying something on sale

A stock split involves dividing existing shares into multiple new shares, which effectively lowers the price per share while keeping the overall value of the investment the same. This is similar to buying something on sale, where the item is still the same but is offered at a reduced price.