Understanding Stock Splits

What is a stock split similar to in terms of currency exchange?

• Exchanging a $20 bill for two $10 bills

• Exchanging a $20 bill for four $5 bills

• Exchanging a $20 bill for a $10 bill and ten $1 bills

• Exchanging a $20 bill for twenty $1 bills

Which company had a 10-for-1 stock split in the summer of 2024?

• Nvidia

• Apple

• Chipotle

• Tesla

What is a potential benefit of a stock split for investors?

• It allows them to own more shares without additional cost

• It guarantees a higher return on investment

• It increases the total value of their investment

• It reduces the risk of investment

Why should investors be cautious about stock splits?

• Stock splits are a sign of a company's financial trouble

• Stock splits always lead to a decrease in stock value

• Stock splits can create unnecessary hype without real value

• Stock splits result in higher taxes for investors

What should investors consider before buying shares after a stock split?

• The company's current stock price

• The company's cash flow and future plans

• The number of shares available

• The opinions of other investors