Which of the following statements about stock splits is correct?

A. Stock splits have no effect on the per-share par value of the stock.
B. Stock splits do not affect a firm's financial statements.
C. All else equal, a stock split generally leads to an increase in the total dividends paid by a company when the split occurs.
D. A company generally initiates a stock split to decrease the proportion of common stock contained in its capital structure.
E. Stock splits should have no effect on a firm's market value.


Answer: E

Business

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