A __ is an accounting transaction that increases the amount of stock held by existing shareholders in proportion to the number of shares currently owned by the shareholders.
A) preemptive right
B) stock split
C) rights offering
D) tender offer

Question

Quizplus · Accepted Answer

A stock split is a transaction whereby a company increases the number of shares outstanding by dividing its existing shares into multiple shares. This results in a decrease in the price per share of the stock while the overall value of the holding remains the same. Shareholders receive additional shares in proportion to the number of shares they own, thereby increasing the amount of stock held by existing shareholders in proportion to the number of shares currently owned.

A __ Is an Accounting Transaction That Increases the Amount