13-2 a. Explain how stock splits affect the (i) company, and (ii) individual investors in a certain way. Pick the correct answer from the list

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13-2 a. Explain how stock splits affect the (i) company, and (ii) individual investors in a certain way. Pick the correct answer from the list of possible answers below and fill in the blanks in the spaces below: (i) Effect on the company Share splits increase the number of shares outstanding. Possible answers: Increase Decrease Have no impact on Share splits reduce the share price. Possible answers: Increase Have no impact on When a share split takes place, the company's equity is does not change. Possible answers: Increases Decreases Does not change Decrease (ii) Effect on the individual investors As a result of a share split, investors' wealth does not change Possible answers: Increases Decreases Does not change As a result of a share split, investors hold more shares. Possible answers: More Less The same number of b. List and explain in what circumstances corporate management would consider splitting the company's shares. Does it usually send a positive or a negative signal to the market

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