Which of the following is a good analogy for a stock split?

A. Getting a pay bonus at your job
B. Buying something on sale
C. Paying a premium for something you want
D. Exchanging large currency bills for smaller bills

Question

07-07-2024
Business

Answered

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Which of the following is a good analogy for a stock split?

A. Getting a pay bonus at your job
B. Buying something on sale
C. Paying a premium for something you want
D. Exchanging large currency bills for smaller bills

Sagot :

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GinnyAnsweridn GinnyAnsweridn · Answer 1 · 2024-07-07T17:03:44-04:00

Final answer:

A stock split is like exchanging large currency bills for smaller bills to represent the increase in number of shares without changing the total value.

Explanation:

A stock split is best analogized with exchanging large currency bills for smaller bills. In a stock split, the total value of the shares increases while the price per share decreases, similar to exchanging a large bill for smaller ones while keeping the same total value.

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