A ________ is created when a corporation increases the number of shares and proportionately decreases the par value.

Question

Quizplus · Accepted Answer

A stock split occurs when a corporation increases the number of shares and proportionately decreases the par value. This is done to make the shares more affordable to investors and to potentially increase liquidity in the market for the stock. A cash dividend is a payment of cash to shareholders, a liquidating dividend is paid when a company is liquidating and distributing its remaining assets to shareholders, and a stock dividend is a distribution of additional shares to shareholders, but does not involve a decrease in par value.

A ________ Is Created When a Corporation Increases the Number