This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Oftentimes when a company's share price is very high it will choose to split the stock price and ... (Read 126 times)

Collmarie

  • Hero Member
  • *****
  • Posts: 569
on: Jun 29, 2018
Oftentimes when a company's share price is very high it will choose to split the stock price and offer each shareholder one share for each they currently hold. Explain why companies might do this and what the effect is on shareholder wealth.
 
  What will be an ideal response?

Question 2

Refer to Scenario 1 . The student has already taken 9 exams and scored a 80 on the 9th one. His average is a 70 after the 9th exam. If he scores a 70 on the tenth exam what will happen to his average?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

sabina576

  • Sr. Member
  • ****
  • Posts: 356
Reply #1 on: Jun 29, 2018
Answer to Question 1

Companies might do this if they believe that the high price of their stock is discouraging many investors from buying. The stock split does not have any impact on shareholder wealth because even though the price has fallen in half the number of shares each stockholder has in their possession has doubled. This leaves the net worth of their holdings in the company the same.

Answer to Question 2

His average after the 10th exam will remain unchanged at 70 . The reason is simple. Even though he scored lower than his previous exam score his score was equal to his average. This would have no impact on the average whatsoever.


Collmarie

  • Member
  • Posts: 569
Reply 2 on: Jun 29, 2018
Excellent

chereeb

  • Member
  • Posts: 326
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Everyone has one nostril that is larger than the other.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

Automated pill dispensing systems have alarms to alert patients when the correct dosing time has arrived. Most systems work with many varieties of medications, so patients who are taking a variety of drugs can still be in control of their dose regimen.

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

Did you know?

Atropine was named after the Greek goddess Atropos, the oldest and ugliest of the three sisters known as the Fates, who controlled the destiny of men.

Because of the high physical activity and the amount of energy expended by the brains of 2- to ... Because of the high physical activity and the amount of energy expended by the brains of 2- to ...
Foods High in Tyramine Foods High in Tyramine
Using the cursors on the oscilloscope, the high- and low-oxygen sensor values can be displayed on ... Using the cursors on the oscilloscope, the high- and low-oxygen sensor values can be displayed on ...
Share of Human Capital in Wages in Developing Countries Share of Human Capital in Wages in Developing Countries
An organizational specialist is hired as a consultant to a company planning to open a coffee ... An organizational specialist is hired as a consultant to a company planning to open a coffee ...
High in the Andes, a scientist measures the stride of a carnivorous dinosaur High in the Andes, a scientist measures the stride of a carnivorous dinosaur
Video: Hormonal feedback loop components

For a complete list of videos, visit our video library