Series 7 practice questioneasyEquity Securities 5
A 2-for-1 stock split will ordinarily cause an investor’s share count to:
- Astay the same while total value doubles
- Bbe cut in half while the price stays the same
- Cdouble while the price per share is cut roughly in half✓ Correct answer
- Ddouble and total market value quadruples
Explanation
Why C — double while the price per share is cut roughly in half
A normal stock split changes the number of shares outstanding and the per-share price proportionately. The investor’s total market value does not change solely because of the split.
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