When a Firm Announces a Two-For-One Stock Split (In the Absence

When a firm announces a two-for-one stock split (in the absence of other new information) , investors should expect that:

A) the earnings per share will decrease by 50% but the stock price will remain constant.
B) the stock price will decrease by 50% but earnings per share will remain constant.
C) both the earnings per share and the stock price will remain the same.
D) both earnings per share and the stock price will decrease by 50%.

Correct Answer:

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