alleryStart learning →A stock split raises the number of shares. What does it do to each share's price?
AStays unchanged
BGoes up a lot
CGoes down
DBecomes nil
Answer & Solution
Correct answer: C. Goes down
More shares for the same total value means each share is priced lower.
Keep practising Dividend Basics
Browse all Dividend Basics questions for CA Inter, or explore more Financial Management topics.
Related questions
Which limits can restrict how much a firm may distribute as dividend?Why might management avoid changing dividend policy abruptly?Which alternative to cash dividends may a firm choose when surplus cash exists?Which type of shareholder usually prefers earnings to be retained?With no NPV-positive projects and surplus cash, what should management do?Management knowing more than the market is called what?If dividends bear higher tax than gains, raising them does what to value?Per the Modigliani-Miller theorem, dividend policy has what effect on firm value?