A 2-For-1 Stock Split

question 58

Multiple Choice

A 2-for-1 stock split:

• A)Is accounted for in the same way as a 100% stock dividend.
• B)Increases the number of outstanding shares of common stock,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 common stock account.
• D)Should logically cause the market price per share to drop by approximately 50%.

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