When one stockholder sells his shares of stock to another stockholder, the corporation's equity will increase.

Question

Quizplus · Accepted Answer

When one stockholder sells his shares of stock to another stockholder, it does not affect the equity of the corporation. Equity represents the residual value of assets after liabilities have been paid. Stock sales simply transfer ownership of existing shares and do not impact the corporation's assets or liabilities.

When One Stockholder Sells His Shares of Stock to Another