Which of the following occurs when the board of directors declares a 3-for-1 share split on 16,000 outstanding shares of $25 per ordinary share?

Question

Quizplus · Accepted Answer

A share split means existing shares are divided into multiple shares. In this case, each share is split into three shares, so the total number of outstanding shares increases from 16,000 to 48,000. The share price decreases proportionally to reflect the split, so each share would be priced at $8.33 ($25/3). Therefore, the price of the shares does not remain the same (option D) and does not increase to $50 per share (option B). Option A is incorrect because the number of outstanding shares does increase.

Which of the Following Occurs When the Board of Directors