Which of the following is not the reason for splitting of a firm's ordinary shares ?
A stock split divides a firm's existing ordinary shares into multiple shares of lower par value to bring the market price into a more affordable trading range, improve…
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Which of the following is not the reason for splitting of a firm's ordinary shares ?
Answer and explanation
Correct answer D
A stock split divides a firm's existing ordinary shares into multiple shares of lower par value to bring the market price into a more affordable trading range, improve liquidity, and signal future profit growth. Increasing the per-share par value by reducing the number of shares is a reverse stock split (share consolidation), not a share split.
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UGC NET Management