When IBM announces its intention to split its stock, let us say a split of 2:1, the news is interpreted as reducing the volatility of the DJ30, and it sometimes leads to an increase in the IBM share price, adjusted for the split. Explain the possible reasons for both effects, the anticipated reduction in the DJ30 volatility and the increase in value. (Note: IBM is one of the DJ30 stocks.)

Take a shot. The DJ volatility can be explained with simple mathmatics. Further, the IBM share split is a signal to investors. What perhaps could the signal be?

  1. 👍 0
  2. 👎 0
  3. 👁 132
asked by joe

Respond to this Question

First Name

Your Response

Similar Questions

  1. Accounting

    Gorton Corporation has 30,000 shares of $10 par value common stock outstanding when it announces a 2-for-1 stock split. Before the split, the stock had a market price of $120 per share. After the split, how many shares of stock

    asked by Anonymous on May 7, 2015
  2. Accounting

    Effect of Stock Split Gino's Restaurant Corporation wholesales ovens and ranges to restaurants throughout the Midwest. Gino's Restaurant Corporation, which had 100,000 shares of common stock outstanding, declared a 5-for-1 stock

    asked by Shan on June 7, 2013
  3. Accounting ll

    The board of directors announces a 2-for-1 stock split on 20,000 outstanding shares of $15.00 par common stock. Immediately after the stock split, the A. outstanding shares increase to 40,000. B. outstanding shares decrease to

    asked by tbell4ever on October 24, 2018
  4. Finance

    Abby previously owned 200 shares of a NEWAGE stock at $25 per share. Today the company split the stock in a 3:1 split. Now what is the value of Abby's stock?

    asked by Steve on November 3, 2015
  5. finance

    Miya, a single investor owns 1000 shares of Advance C-Synergy (ACS), common stock. She originally bought the stock two years ago at initial public offering (IPO) price at RM5 per share. The stock of this fast growing technology

    asked by hong on May 19, 2012
  6. Accounting 2 goes with the 1st question

    Split common stock 4 to 1 and reduced PAR from $80 to $20. After the split there were 600,000 shares.

    asked by Jeannie on November 6, 2013
  7. History, Urgent

    Early in the war, American Indians living in Indian Territory disagreed on which side to take. Which of the following best describes the split that occurred? A.groups split along religious lines (Christians vs. non-Christians)

    asked by Katt<3Bobby on October 4, 2014

    Why split field microscopy is used in mask aligner? I. As dimension of the alignment marks on wafer as well as masks are in micron range, microscopes are required to observe those while aligning II. Split-field microscopy enables

    asked by medical electronics on August 27, 2018
  9. Cost accounting

    Hardahl Chemical produces thc. Approximated net realizable values at split-off.ree joint products and one by-product. The following information is available for September 2008:Sales Value at Cost after Final Selling Product

    asked by Danny on October 21, 2009
  10. Cost Accounting

    (allocating joint cost) In one joint process, Hardahl Chemical produces three joint products and one by-product. The following information is available for September 2008 Sales Value at Cost after Final SellingProduct Gallons

    asked by Danny on October 26, 2009

More Similar Questions