Question

Even if a stock split has no information content, and even if the dividend per share adjusted for the split is not increased, there can still be a real benefit (i.e., a higher value for shareholders) from such a split, but any such benefit is probably small. True False

Answer 1

Answer:

True

Explanation:

Stock split is used to increase number of shares floating in the market. In this strategy current shares are increased by issuing more shares to current shareholders. This increases the number of shares which each shareholders holds while value of total shares remains the same.