One Reason Why a Company May Choose a Stock Split

question 116

True/False

One reason why a company may choose a stock split over a stock dividend is that the stock split does not reduce Retained Earnings.

---

Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Stock Dividend

A distribution of shares of stock to its stockholders.

Statement of Cash Flows

A financial statement showing the inflows and outflows of cash within a company over a specific period.

Declaration

A formal or explicit statement, announcement, or assertion.