State whether the following statements are true or false with reasons: Stock Dividends and Stock Splits may increase the stock price but not the value of the business.

True. A stock split increases the number of shares in a public company and reduces the price per share proportionally, such that the total market capitalization of the company remains the same. A stock dividend (bonus issue) also increases the number of shares and reduces the price per share, without increasing the market capitalization. Both are accounting adjustments that do not change the underlying value or assets of the business, only how its ownership is divided. While they might temporarily influence stock price due to psychological factors or increased liquidity, they do not fundamentally alter the company's intrinsic value.