Which of the Following Statements Accurately Explains Why the Board

question 14

Multiple Choice

Which of the following statements accurately explains why the board of directors of a company whose financial future contains some uncertainties might issue a 2-for-1 stock split rather than declare a 100% stock dividend?

• A)A stock split would not reduce the market price per share,whereas a stock dividend would.
• B)A stock split would reduce the market price per share,whereas a stock dividend would not.
• C)A stock split would increase total stockholders' equity,whereas a stock dividend would not.
• D)A stock split would not reduce retained earnings,whereas a stock dividend would.