Asked by Amber Koeuth on Jun 16, 2024
Verified
Which of the following does not correctly describe the effect of Mylan Company declaring and distributing a 2-for-1 common stock split?
A) Mylan's current ratio remained the same.
B) Mylan's return on equity ratio remained the same.
C) Mylan's debt-to-equity ratio remained the same.
D) Mylan's earnings per share remained the same.
Common Stock Split
A division of a company's existing shares into multiple ones to boost the liquidity of the shares, making them more affordable to small investors without altering the shareholder's equity.
Return on Equity
A financial ratio calculated by dividing net income by shareholder equity, used to measure the profitability of a company in generating profit from its equity investments.
Debt-to-Equity Ratio
This ratio measures the mix of shareholders' equity to debt in financing a company's assets.
- Inspect the impact of specific transactions on financial ratios and the monetary status of a business.
- Ascertain the influence of stock dividends, stock splits, and the issuance of shares on different financial metrics.
Verified Answer
Learning Objectives
- Inspect the impact of specific transactions on financial ratios and the monetary status of a business.
- Ascertain the influence of stock dividends, stock splits, and the issuance of shares on different financial metrics.
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