A 2-For-1 Stock Split Is Declared

question 26

Multiple Choice

A 2-for-1 stock split is declared. In this case, which of the following statements is true?

• A) The cash account declines.
• B) The common stock account rises.
• C) The retained earnings fall.
• D) The par value of the common stock is reduced.

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Definitions:

Lithosphere

The rigid outer layer of the Earth, encompassing the crust and the uppermost mantle, responsible for tectonic activities.

Mid-ocean Ridge

An underwater mountain range, formed by plate tectonics, that stretches across the ocean floors and is characterized by a rift at its summit from which new oceanic crust is formed.

Seafloor Elevation

The vertical height of the ocean floor above or below a reference surface, typically mean sea level.

Rocks Cooling

The process of igneous rocks solidifying and crystallizing from magma or lava as they lose heat.