Question 12

Progressive Corporation executed a 3:1 (3 for 1) common stock split on April 23, 2002. What was most probably happening to the value of one share of their common stock BEFORE the split?

		A. The stock price had gone up considerably (above $80) before the split
		B. The stock price had gone down considerably before the split
		C. The stock had reached its maturity date and the principal amount was paid

Progressive Corporation executed a 3:1 (3 for 1) common stock split on April 23, 2002. What almost certainly happened to the value of one share of their common stock IMMEDIATELY AFTER (or as a result of) the split.

		A. The per-share stock price went down by the amount of the upcoming dividend
		B. The per-share stock price went down to approximately 1/3 of its previous value per share
		C. The per-share stock price went down to approximately of its previous value per share
		D. The per-share stock price went up to approximately 3 times its previous value per share

Progressive Corporation executed a 3:1 (3 for 1) common stock split on April 23, 2002. In general, why do companies split their stock 3 for 1?

		To raise the per-share stock price
		To lower the per-share stock price
		To convert the shares into bonds
		To earn cash to finance immediate business needs