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%.

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Definitions:

Mexico

A country located in the southern portion of North America, known for its rich culture, history, and diverse landscapes.

United States

A country located in North America, consisting of 50 states and a federal district, known for its large economy and diverse population.

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The cost of forgoing the next best alternative when making a decision.

Production Possibility Frontier

A graph that shows all the highest production potentials for two products, based on a specific set of resources and various factors.