Which one of the following increases the number of shares outstanding but does not increase the value of owners' equity?
A)Stock repurchase
B)Reverse stock split
C)Stock split
D)Cash distribution
E)Liquidating dividend

Question

Quizplus · Accepted Answer

A stock split increases the number of shares outstanding but does not change the total value of the company or the value of owners' equity. For example, if a company had 1,000 shares outstanding and did a 2-for-1 split, it would now have 2,000 shares outstanding but the total value of the company would remain the same. A stock repurchase would decrease the number of shares outstanding and could increase the value of owners' equity, while a reverse stock split would decrease the number of shares outstanding but could increase the per-share value of owners' equity. Cash distribution and liquidating dividends would decrease the value of owners' equity.

Which One of the Following Increases the Number of Shares