Common Stock
A company announces a 2-for-1 stock split. An investor holding 200 shares at $80 will have:
In a 2-for-1 forward split, shareholders receive 2 new shares for each share owned, doubling the share count. The price is halved to maintain the same total value: 200 shares becomes 400 shares, $80 becomes $40. Total va
Complete Analysis & Legal Rationale
In a 2-for-1 forward split, shareholders receive 2 new shares for each share owned, doubling the share count. The price is halved to maintain the same total value: 200 shares becomes 400 shares, $80 becomes $40. Total value remains $16,000 (200 x $80 = 400 x $40).
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing concept in the explanation.
Does not match the governing concept in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing concept in the explanation.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.