All Other Things Equal,a Stock Split Will Have Which of the Following

question 28

Multiple Choice

All other things equal,a stock split will have which of the following effects on shareholder's wealth?

• A)Shareholder's wealth should be reduced.
• B)Shareholder's wealth should remain constant
• C)Shareholder's wealth should be increased
• D)Stock dividends and shareholder wealth are not related.

---

Definitions:

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profit.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits.

Indirect Method

A cash flow statement presentation technique where net income is adjusted for changes in balance sheet accounts to calculate operating cash flow.

Indirect Method

A technique used in cash flow statement preparation where net income is adjusted for non-cash transactions to calculate operating cash flows.