A Stock Split

question 114

Multiple Choice

A stock split:

• A)has no effect on total equity.
• B)increases Common Stock and decreases Paid-in Capital.
• C)increases assets and decreases equity.
• D)decreases Retained Earnings and increases Paid-in Capital.

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Definitions:

Equity

Refers to the ownership interest held by shareholders in a corporation, represented by the company's common and preferred stock.

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a stock or another security at a specified price before the contract expires.