In accounting for a stock split, a company usually
A)receives less cash than market value
B)receives more cash than market value
C)issues more shares of stock
D)retires shares of stock

Question

Quizplus · Accepted Answer

In a stock split, a company increases the number of outstanding shares by issuing more shares of stock to current shareholders. This is usually done in a ratio such as 2-for-1, meaning that for every share a shareholder currently holds, they will receive two more shares. The overall value of the shares owned by each shareholder remains the same, but the share price will adjust accordingly to reflect the increased number of shares. The company does not receive any cash in a stock split.

In Accounting for a Stock Split, a Company Usually