Question: When Crocs, the shoe company, reported in early 2007 that its first-quarter earning had increased from the pervious year, its stock price jumped to over

When Crocs, the shoe company, reported in early 2007 that its first-quarter earning had increased from the pervious year, its stock price jumped to over $80 per share. At the same time, the company announced a 2-for 1 stock split.18 What is a stock split and what effect does it have on the company’s stockholders’ equity? What effect will it likely have on the market value of the company’s stock? In light of your answers, do you think the stock split is positive for the company and for its stockholders?

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