Prezario's has 225,000 shares of stock outstanding with a par value of $1.00 per share. The current market value of the ﬁrm is $1,690,000. The company just announced a 2-for-1 stock split. By how
Much does the common stock account balance change after the split?

Question

Quizplus · Accepted Answer

A stock split does not change the total par value of the common stock account. The number of shares increases, but the par value per share decreases proportionally, leaving the total par value unchanged.

Prezario's Has 225,000 Shares of Stock Outstanding with a Par