Q) A stock split has no impact on the value of the firm.
a. True
b. False
| The answer is True. | |||||||||
| A stock split has no impact on the value of the firm. | |||||||||
| When a company declares a stock split, the number of shares of that company increases, | |||||||||
| but the overall market value of shares remain the same.Existing shares split, but the | |||||||||
| underlying value remains the same. As the number of shares increases, price per share goes down. | |||||||||
| Stock split is done to infuse the liquidity and to make shares affordable for various investors who | |||||||||
| could not buy the of that company due to high price. | |||||||||
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