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

question 151

Multiple Choice

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

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

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Definitions:

Service Department Allocations

The process of distributing overhead costs from service departments to producing departments based on a predetermined criterion.

Income

The revenue that a business or individual receives within a specified period, including wages, profits, rents, and other earned amounts.

Residual Income

Income that remains after deducting all costs, expenses, and taxes necessary to sustain the operation of the business.

Return On Investment

A financial metric used to evaluate the efficiency of an investment, calculated as the net profit divided by the initial cost of the investment.