A 2-For-1 Share Split

question 50

Multiple Choice

A 2-for-1 share split:

• A) Is accounted for in the same way as a 100% stock dividend.
• B) Increases the number of outstanding ordinary shares, but par value per share remains the same as before the split.
• C) Is recorded by transferring the par value of additional shares from retained earnings to the ordinary share account.
• D) Should logically cause the market price per share to drop by approximately 50%.

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