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 75 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

komodo7

  • Member
  • Posts: 322
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

The Babylonians wrote numbers in a system that used 60 as the base value rather than the number 10. They did not have a symbol for "zero."

Did you know?

Warfarin was developed as a consequence of the study of a strange bleeding disorder that suddenly occurred in cattle on the northern prairies of the United States in the early 1900s.

Did you know?

Patients who have undergone chemotherapy for the treatment of cancer often complain of a lack of mental focus; memory loss; and a general diminution in abilities such as multitasking, attention span, and general mental agility.

Did you know?

Approximately 500,000 babies are born each year in the United States to teenage mothers.

Did you know?

Malaria mortality rates are falling. Increased malaria prevention and control measures have greatly improved these rates. Since 2000, malaria mortality rates have fallen globally by 60% among all age groups, and by 65% among children under age 5.

On the slopes of Chimborazo, a 6,310 m high volcanic peak in the Andes Mountains of Ecuador, Alexand On the slopes of Chimborazo, a 6,310 m high volcanic peak in the Andes Mountains of Ecuador, Alexand
Risks of infectious disease increase in (a) high-density agricultural populations compared to (b) lo Risks of infectious disease increase in (a) high-density agricultural populations compared to (b) lo
Four Brain Structures with High Myelination in Early Childhood Four Brain Structures with High Myelination in Early Childhood
The testing procedure that was used to evaluate the neuropsychological status of split-brain ... The testing procedure that was used to evaluate the neuropsychological status of split-brain ...
The Z lens, which was developed by Zaidel to study functional asymmetry in split-brain patients. It ... The Z lens, which was developed by Zaidel to study functional asymmetry in split-brain patients. It ...
U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994 U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994
Video: Interspecific Competition Relationship - Competitive & Niche Differentiation

For a complete list of videos, visit our video library