Which of the Following Statements Is not True About a 2-For-1

question 24

Multiple Choice

Which of the following statements is not true about a 2-for-1 split?

• A)Par value per share is reduced to half of what it was before the split.
• B)Total contributed capital increases.
• C)The market price probably will decrease.
• D)A stockholder with ten shares before the split owns twenty shares after the split.

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Definitions:

Total Assets

The sum of everything of value owned by a business, including cash, securities, equipment, and real estate.

Liabilities

Liabilities are financial obligations or debts owed by a business or an individual to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Stockholders' Equity

Represents the owners' residual interest in the assets of a corporation after deducting liabilities, often referred to as shareholders' equity or owner's equity.

Rights of Creditors

The legal entitlements of creditors to receive payments from borrowers or claimants against the assets of a debtor according to the terms of the debt agreement.