Which of the following statements are true of a “two-for-one stock split?”:

Question

1. It may signal higher future earnings
2. By creating more shares at a lower price, marketability may be improved
3. It increases the “Equity Section” of a company’s Balance Sheet

a. 1 and 2
b. 1 and 3
c. 2 and 3
d. All three are true

Answer 1

Equity is not changed.