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Exam IIA-CIA-Part3 All Questions

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Exam IIA-CIA-Part3 topic 1 question 105 discussion

Actual exam question from IIA's IIA-CIA-Part3
Question #: 105
Topic #: 1
[All IIA-CIA-Part3 Questions]

Which of the following is the most likely reason an organization may decide to undertake a stock split?

  • A. To keep stock price constant.
  • B. To keep shareholders' equity constant.
  • C. To increase shareholders' equity.
  • D. To enhance the stock liquidity.
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Suggested Answer: D 🗳️

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emtofid
1 day, 15 hours ago
Selected Answer: D
A stock split increases the number of shares outstanding, which lowers the per-share price, making the stock more affordable and accessible to a broader range of investors. This increased availability can enhance the liquidity of the stock by making it easier to buy and sell shares in the market.
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