A Company May Declare a Stock Split To

question 113

Multiple Choice

A company may declare a stock split to:

• A)reduce total equity.
• B)avoid playing a cash dividend.
• C)decrease the market value of the stock.
• D)reduce retained earnings.

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Definitions:

Revaluation Surplus

An increase in the value of an asset that is reflected on the company's balance sheet when the asset is revalued to its current market value, leading to an appreciation in the asset's worth that is not realized through sales.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the IASB that aims at making global financial statements more comparable.

Statement of Financial Position

Another term for the balance sheet, detailing a company's assets, liabilities, and equity at a specific point in time.

IFRS

Global accounting guidelines known as International Financial Reporting Standards are used for the preparation of financial statements.