The Shareholders' Equity Section of the Balance Sheet of the XYZ

question 68

Multiple Choice

The shareholders' equity section of the balance sheet of the XYZ Corp. is as follows: $\begin{array}{ll}\text { Common stock } & \$ 20,000,000 \\\text { Retained earnings } & \$ 176,000,000 \\\text { Total } & \$ 196,000,000\end{array}$
If the company now splits its stock 5-for-1, which of the following is correct?

• A) the common stock section will increase to $100,000,000
• B) the market price per share will probably remain unchanged
• C) the book value per share will decline to $17.60
• D) the number of shares outstanding will increase

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Definitions:

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Public Mental Hospital System

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1950s

A decade marked by post-World War II recovery, significant cultural and economic changes, and the start of the Cold War era.