Asked by Assata Dockins on Jun 05, 2024
Verified
From an accounting standpoint, stock splits are accomplished by:
A) increasing the number of shares outstanding.
B) increasing par value of existing shares.
C) reducing the par value of existing shares.
D) a and c
Stock Splits
A company activity where existing shares are split into more shares to increase share liquidity without changing the overall market value.
Par Value
The face value of a bond or stock, representing the amount that the issuer agrees to pay at maturity or the nominal value of a share.
Shares Outstanding
The total number of shares of a corporation that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.
- Understand the impact of stock splits and dividends on company financial statements and investor holdings.
Verified Answer
JP
Joseph PulitanoJun 11, 2024
Final Answer :
D
Explanation :
Stock splits are accomplished by increasing the number of shares outstanding and reducing the par value of existing shares, without changing the total value of the shares held by shareholders.
Learning Objectives
- Understand the impact of stock splits and dividends on company financial statements and investor holdings.