Which of the Following Is a True Statement

question 126

Multiple Choice

Which of the following is a true statement?

• A)A stock split will increase total stockholders' equity, but a stock dividend will not.
• B)Neither a stock split nor a stock dividend will increase total stockholders' equity.
• C)A stock dividend will increase total stockholders' equity, but a stock split will not.
• D)A stock split will decrease retained earnings, but a stock dividend will not.

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Definitions:

Organization Expenses

Expenses associated with the formation of a corporation or organization, such as legal fees, registration fees, and promotional expenses.

Par Value

A nominal value assigned to a security, such as a stock, which is stated in the corporate charter and often bears no relation to its market value.

Price-Earnings Ratio

A valuation metric for a company's current share price relative to its per-share earnings, indicating how much investors are willing to pay for each dollar of earnings.

Earnings Per Share

A financial metric that calculates the portion of a company's profit allocated to each outstanding share of common stock.