A 3-For-1 Common Stock Split

question 128

Multiple Choice

A 3-for-1 common stock split,

• A)Will likely not affect the market value of the stock
• B)Has no effect on common share account
• C)Will cause a change in the allocation of dividends to common stock relative to preferred stock
• D)Decreases retained earnings by the par value of shares distributed in the split

---

Definitions:

Elastic Supply

A situation where the quantity supplied of a good or service changes significantly in response to a change in price.

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, placing a higher burden proportionally on lower-income earners.

Tax Schedules

Detailed tables or lists provided by tax authorities that outline the tax rates applicable to various levels of taxable income.

Taxable Income

The amount of an individual’s or corporation's income used to calculate how much tax they owe to the government, after deductions and exemptions.