If a firm declares a 20:1 stock split, and the pre-split price was $500, then we might expect the post-split price to be $25. However, it often turns out that the post-split price will be higher than $25. This higher price could be due to signaling effects investors believe that management split the stock because they think the firm is going to do better in the future. The higher price could also be because investors like lower-priced shares.
a. True.
b. False.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “If a firm declares a 20:1 stock split, and the pre-split price was $500, then we might expect the post-split price to be $25. However, it ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $13,000 and ending work in process inventory of $18,000.
Answers (1)
The assumption of constant velocity in the quantity equation is the equivalent of the assumption of a constant: A. short-run aggregate supply curve. B. long-run aggregate supply curve. C. price level in the short run. D.
Answers (1)
You are playing a fair gamble with your initial wealth $1,000,000. The expected return of each play of the gamble is 0% since it is a fair gamble.
Answers (1)
Paula owns a variety store in a tourist town. The store recently went online, and the response has been remarkable.
Answers (1)
Calaf's Drillers erects and places into service an off-shore oil platform on January 1, 2018, at a cost of $10,000,000. Calaf is legally required to dismantle and remove the platform at the end of its useful life in 10 years.
Answers (1)
New Questions in Business
Explain what is meant by market research.
Answers (1)
Jean, a restaurant critic, publishes a review in a national daily that the sandwiches served at his friend's deli are usually not fresh. Tom, the owner of the deli, notices a significant decrease in customers after the review gets published.
Answers (1)
Why did the Soviet Union experience many surpluses and shortfalls? A) The labor force wasn't well educated B) The cold climate made farming hard C) Central planners could not manage every detail D) The country depended on imports to obtain resources.
Answers (1)
A hospitality operation has sales revenue of $462,000 with variable cost averaging 44%. Fixed costs are $188,000. The owner wants a net income after tax of $50,400 based on a tax rate of 28%. a.
Answers (1)
True or false fdr was eager to use deficit spending to end the economic crisis.
Answers (1)