When a company declares a 2-for-1 stock split,
A)stockholders' equity is doubled.
B)there is no effect on total stockholders' equity.
C)a shareholder who previously held 100 shares will have 300 shares after the split.
D)the price of each share will be one-third of what it was before the stock split.

Question

Quizplus · Accepted Answer

A 2-for-1 stock split means that a shareholder will receive an additional share for each share they own, effectively doubling the number of shares but halving the price per share. This action does not affect the total stockholders' equity; it merely redistributes the existing equity across a larger number of shares.

When a Company Declares a 2-For-1 Stock Split