alleryStart learning →Why might a firm split its shares when the price is very high?
ATo lower its reserves held
BTo attract small investors
CTo cut its yearly tax bill
DTo raise the face value
Answer & Solution
Correct answer: B. To attract small investors
A very high price can deter small investors, and a split lowers the price per share.
Keep practising AS 20 Earnings Per Share
Browse all AS 20 Earnings Per Share questions for CA Inter, or explore more Accounting topics.
Related questions
P/E can also be found by market capitalization divided by:As a ratio of a stock to a flow, the P/E ratio has the units of:Forward P/E divides price by which earnings amount?Trailing P/E uses earnings from which period?A company earns an EPS of Rs 12.50 and trades at Rs 150. Its P/E ratio is:A share trades at $24 and its EPS is $3. Its P/E ratio is:The P/E ratio compares a company's share price with its:Adjusted price charts divide pre-split closing prices by: