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:

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, thereby eroding purchasing power.

Future Date

A specified time in the future, often used in the context of planning, forecasting, or setting deadlines.

Compounded Monthly

A method of calculating interest where the interest is added to the principal amount each month, with each subsequent calculation including the previously accumulated interest.

Interest

The cost associated with the right to borrow funds, often represented as a percentage rate per year.