Which of the Following Occurs When a 2-For-1 Stock Split

question 212

Multiple Choice

Which of the following occurs when a 2-for-1 stock split is declared?

• A) The balance in Common Stock remains the same.
• B) The balance in Common Stock is reduced to half the original amount.
• C) The balance in Common Stock doubles.
• D) The balance in Paid-in Capital in Excess of Par-Common doubles.

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Definitions:

Utility Maximizing

Acting in a way to achieve the highest level of satisfaction possible with available resources.

Demand For Labor

The total amount of labor that employers want to hire at various wage rates, contingent on factors such as technology, the price of the goods being produced, and the availability of other inputs.

Reduced Wage

A wage that is decreased from a previous level, often due to economic pressures or changes in job responsibilities.

Income Effect

The alteration in a person's or economic system's earnings and the effect of this alteration on the demand for a particular product or service.