The reduction of par or stated value of stock by issuance of a proportionate number of additional shares is termed a:

Question

Quizplus · Accepted Answer

A stock split involves the issuance of additional shares, which reduces the par or stated value of each share. A stock dividend involves the distribution of additional shares to current shareholders, but this does not necessarily involve a reduction in par or stated value. Stock options are contracts that give individuals the right to buy or sell stock at a certain price. Preferred dividends are a fixed return paid to holders of preferred stock.

The Reduction of Par or Stated Value of Stock by Issuance