SIE Exam Question 261: Answer and Explanation

Question: 261

Among the reasons a corporate Board would declare a stock split

• A. is to increase corporate net worth
• B. is to decrease the annual dividend
• C. is to reduce individual shareholders' percentage ownership
• D. is to make the stock more affordable

Correct Answer: D

Explanation:

D: The stock split lowers the market price of a stock, which makes buying a round lot (100 sh.) more 'affordable.'