A corporation began operations on October 1, 2014, with 3,000 shares of $2 par common stock authorized. The company issued common stock on several occasions during 2014 and 2015. On December 31, 2015, the company repurchased 1,000 shares of its outstanding shares and then reissued 500 of these shares on March 1, 2016. On June 1, 2016, the company's board of directors declared a 2-for-1 stock split. As a result of this stock split, which of the following is true?

Question

Quizplus · Accepted Answer

A stock split does not affect the total stockholders' equity of the company, as it only changes the number of shares outstanding and their par value. The total assets and liabilities of the company are also unaffected by a stock split.

A Corporation Began Operations on October 1, 2014, with 3,000