Dillon Corporation Splits Its Common Stock 2 for 1, When

question 178

Multiple Choice

Dillon Corporation splits its common stock 2 for 1, when the market value is $40 per share. Prior to the split, Dillon had 50,000 shares of $10 par value common stock issued and outstanding. After the split, the par value of the stock

• A) remains the same.
• B) is reduced to $2 per share.
• C) is reduced to $5 per share.
• D) is reduced to $20 per share.

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Definitions:

Power Supply

A device or system that provides the necessary electrical power to operate or charge devices.

Ohms

The standard unit of electrical resistance in the International System of Units (SI), symbolizing the resistance between two points of a conductor.

Amps

A unit of electric current in the International System of Units (SI), short for amperes.

Volts

Volts are the unit of electric potential and electric potential difference in the International System of Units (SI), indicating the force that drives electric current between two points.