A Stock Split

question 36

Multiple Choice

A stock split:

• A) increases the total value of the common stock account.
• B) decreases the value of the retained earnings account.
• C) increases the par value per share.
• D) increases the value of the capital in excess of par account.
• E) decreases the market value per share.

---

Definitions:

Cost Of Debt

The effective interest rate that a company pays on its total debt, influencing its finance strategy.

Total Capital

The sum of a company's equity and debt, reflecting the total resources available to the company for business activities.

Modigliani And Miller Model

A financial theory stating that the market value of a company is determined by its earning power and the risk of its underlying assets, and is independent of the way it chooses to finance its investments or distribute dividends.

Capital Markets

Capital Markets are financial markets where long-term debt or equity-backed securities are bought and sold, facilitating the raising of capital.