A 2-For-1 Share Split

question 137

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 share, 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%.

---

Definitions:

Legal Right

Established principle or regulation recognized and enforced by law that grants or restricts actions and grants entitlements to individuals.

Federal Law

A body of rules and regulations enacted by the federal government of a country to govern the behavior of its citizens and organizations at the national level.

Privileged Communication Laws

Legal statutes that protect certain communications within specific relationships, such as attorney-client, from being disclosed without permission.

HIPAA

The Health Insurance Portability and Accountability Act, a U.S. law designed to provide privacy standards to protect patients' medical records and other health information provided to health plans, doctors, hospitals, and other health care providers.