Pryor Corporation Issued a 2-For-1 Common Stock Split

question 72

Multiple Choice

Pryor Corporation issued a 2-for-1 common stock split. The shares had been originally issued at $ 10 per share. At what amount should retained earnings be capitalized for the additional shares issued?

• A) There should be no capitalization of retained earnings.
• B) $ 10 per share
• C) market value on the declaration date
• D) market value on the payment date

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Definitions:

Recession 2008-2009

A period marked by a significant decline in economic activity across the global economy, initiated by the financial crisis of 2007-2008.

Business Cycle

The natural rise and fall of economic growth, consisting of periods of expansion and contraction in the economy over time.

Aggregate Demand

The total demand for goods and services within a particular market or economy at current price levels.

Price Level

The price level is an index that measures the average prices of goods and services in an economy over a period of time.