Discuss any 2 advantages and limitations of Stock Splits.

CA Intermediate · Financial Management and Strategic Management · PYQS · September 2025
Discuss any 2 advantages and limitations of Stock Splits.

Suggested Answer and Working Notes:

Advantages of Stock Splits It makes the share affordable to small investors.Number of shares may increase the number of shareholders; hence the potential of investment may increase. Limitations of Stock Splits Additional expenditure needs to be incurred on the process of stock split.Low share price may attract speculators or short term investors, which are generally not preferred by any company.

Topics: Part-A: Financial Management

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