Which of the Following Statements Is Not True About a 2-For-1

question 19

Multiple Choice

Which of the following statements is not true about a 2-for-1 stock split?

• A)Total contributed capital increases.
• B)Par value per share is reduced to half of what it was before the split.
• C)A stockholder with ten shares before the split owns twenty shares after the split.
• D)The market price probably will decrease.

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Definitions:

Controlling Interest

Ownership interest in a business entity that gives the holder the power to direct or influence the direction of management and policies.

Consolidation Worksheet

An instrument utilized for creating combined financial reports that merges the finances of a parent entity with those of its subsidiary companies.

Goodwill Impairment

An accounting process involving the reassessment of the value of goodwill on the balance sheet and reducing it if its market value has declined below the carrying value.

Noncontrolling Interest

Noncontrolling interest is a financial stake in a subsidiary held by investors other than the parent company, reflecting their share of the subsidiary's net assets and earnings.