2. Which of the following actions will best enable a company to raise additional equity capital? a. Refund long-term debt with lower cost short-term debt. b. Declare a stock split. c. Begin an open-market purchase dividend reinvestment plan. d. Initiate a stock repurchase program. e. Begin a new-stock dividend reinvestment plan. 7. Which of the following statements is CORRECT? a. When firms are deciding on the size of stock splitssay whether to declare a 2-for-1 split or a 3-for-1 split, it is best to declare the smaller one, in this case the 2-for-1 split, because then the after-split price will be higher than if the 3-for-1 split had been used. b. Back before the SEC was created in the 1930s, companies would declare reverse splits in order to boost their stock prices. However, this was determined to be a deceptive practice, and it is illegal today. c. Stock splits create more administrative problems for investors than stock dividends, especially determining the tax basis of their shares when they decide to sell them, so today stock dividends are used far more often than stock splits. d. When a company declares a stock split, the price of the stock typically declinesby about 50% after a 2-for-1 splitand this necessarily reduces the total market value of the equity. e. If a firms stock price is quite high relative to most stockssay $500 per sharethen it can declare a stock split of say 10-for-1 so as to bring the price down to something close to $50. Moreover, if the price is relatively lowsay $2 per sharethen it can declare a reverse split of say 1-for-25 so as to bring the price up to somewhere around $50 per share