Asked by Emily Ratliff on May 09, 2024
Verified
A corporation has 10,000 shares of $100 par stock outstanding. If the corporation issues a 5-for-1 stock split, the number of shares outstanding after the split will be 40,000.
Par Stock
The ideal stock level that a business aims to maintain to fulfill customer orders without overstocking.
Stock Split
A reduction in the par or stated value of a common stock and the issuance of a proportionate number of additional shares.
- Understand the financial impact and accounting treatment of stock splits and stock dividends on a company's financial statements.
Verified Answer
SN
Suyen Nichols 2020May 12, 2024
Final Answer :
False
Explanation :
After a 5-for-1 stock split, the number of shares outstanding will be 50,000 (10,000 shares * 5).
Learning Objectives
- Understand the financial impact and accounting treatment of stock splits and stock dividends on a company's financial statements.