When a corporation completes a 3-for-1 stock split,
A) the ownership interest of current stockholders is decreased
B) the market price per share of the stock is decreased
C) the par value per share is decreased
D) the market price per share of the stock and the par value per share are decreased

Question

Quizplus · Accepted Answer

In a 3-for-1 stock split, each share is divided into three, which typically leads to a decrease in both the market price per share and the par value per share. This adjustment is made to make the stock more accessible to investors by lowering the trading price, without affecting the total value of the company or the proportionate ownership of existing shareholders.

When a Corporation Completes a 3-For-1 Stock Split