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CSI CSC1 Exam - Topic 7 Question 2 Discussion

Actual exam question for CSI's CSC1 exam

Question #: 2
Topic #: 7

[All CSC1 Questions]

What is the main benefit for the investors when a company announces a stock spit?

AAn increase in the shares' affordability.

BAn increase in the shares' market price.

CAn increase in the value of the shareholder stake

DAn Increase in the proportion of the shareholder's stake.

Show Suggested Answer

Suggested Answer: A

A stock split reduces the price per share, making the shares more affordable to smaller or retail investors. This does not increase the market capitalization or shareholder value but makes trading easier by improving liquidity and accessibility.

Volume 1, Chapter 8: Equity Securities, section on 'Stock Splits and Consolidations,' describes the purpose and benefits of stock splits for investors, particularly in terms of affordability and liquidity.

by Ngoc at Aug 05, 2026, 07:44 PM

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Marta

18 hours ago

A stock split makes shares more affordable!

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Phung

6 days ago

I lean towards C because it seems like a stock split would increase the number of shares, but the total value stays the same, right?

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Royal

11 days ago

I practiced a similar question, and I feel like the answer could be A too, since lower prices might attract more buyers.

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Rosalyn

16 days ago

I'm not entirely sure, but I remember something about stock splits not actually increasing the overall value. Maybe it's D?

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Nichelle

21 days ago

I think the main benefit is about affordability, so I might go with A. It makes shares more accessible to smaller investors.

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