Which of the Following Occurs When the Board of Directors

question 104

Multiple Choice

Which of the following occurs when the board of directors declares a 3-for-1 stock split on 17,000 outstanding shares of $24 par common stock?

• A)The par value of the stock remains the same.
• B)The par value of the stock increases to $48 per share.
• C)The number of outstanding shares remains at 17,000.
• D)The number of outstanding shares increases to 51,000.

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Definitions:

Capital Balances

The amount of money or value that partners or owners have invested in a business.

Salary Allowance

A fixed amount of money given to employees in addition to their regular salary, often covering specific expenses or compensations.

Income-Sharing Ratio

The proportion in which partners in a business agree to distribute the net income or loss.

Salary Allowance

A fixed amount or benefit often added to an employee's salary, such as for travel or housing.