Which of the Following Is TRUE of a Stock Split

question 58

Multiple Choice

Which of the following is TRUE of a stock split and a stock dividend?

• 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:

Long Lead Times

Extended periods required to manufacture a product or complete a process, often causing delays in production or output.

Long Setup Times

Extended periods required to prepare equipment or processes for a new production run, often causing inefficiencies.

Large Batch Sizes

Large Batch Sizes refer to the production strategy of manufacturing goods in large quantities at once to maximize efficiency and reduce costs per unit.

Large Inventories

Holding significant quantities of product or materials on hand, which can impact a company's financial statements and operational efficiency.