A 3-for-1 stock split will reduce the per share par value and will

Question

Quizplus · Accepted Answer

A 3-for-1 stock split increases the number of shares outstanding, which dilutes the earnings per share since the same amount of earnings is spread over more shares. It does not proportionately decrease the number of shares (it increases them), does not increase owners' equity (the total value remains the same, just divided differently), and does not increase the total par value of the common stock (the per share par value decreases, keeping the total par value constant).

A 3-For-1 Stock Split Will Reduce the Per Share Par