Which of the Following Occurs When the Board of Directors

question 98

Multiple Choice

Which of the following occurs when the board of directors declares a 3-for-1 stock split on 10,000 outstanding shares of $15 par common stock?

• A)The par value of the stock remains the same.
• B)The par value of the stock increases to $30 per share.
• C)The number of outstanding shares remains at 10,000.
• D)The number of outstanding shares increases to 30,000.

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Definitions:

Dividend Payout Ratio

The percentage of net income that a company pays out to its shareholders as dividends, indicating how much money a company returns to shareholders versus retaining.

Price-Earnings Ratio

A measure of a company's current share price relative to its per-share earnings.

Dividend Payout Ratio

A financial ratio that shows the percentage of a company's net income that is paid out to its shareholders as dividends.

Year 2

A term that refers to the second year in a specific period, often used in planning, reporting, or comparison contexts.