Which is true with regard to a three-for-two stock split

Assignment Help Managerial Accounting

Reference no: EM132741540

Stock dividends and stock splits can be used to accomplish the same objective - impacting the trading price of shares. However, for financial reporting purposes they are accounted for differently. Explain the general accounting difference between stock dividends and stock splits. [Note: you do NOT need to discuss the valuation issue related to small vs. large stock dividends.]

Problem 1: Which of the following is true with regard to a 3-for-2 stock split?

A. The proportion of the company that each stockholder owns increases

B. Retained earnings is decreased

C. Par value decreases

D. Total stockholder equity increases

E. The market price per share increases by roughly 50%

Reference no: EM132741540

Questions Cloud

What payment to creditors made on last day of month will : If current assets exceed current liabilities, payment to creditors made on the last day of the month will? increase cash flow from operations

Identify the stakeholders impacted by the project : In a 4- to 5-page project proposal written to the leadership of your healthcare organization, propose a nursing informatics project for your organization.

How the state and local governments interact : How the state and local governments interact. How the power sharing takes place. The resources available to you in your area.

What was the book value of the equipment at december : Equipment acquired on January 8 at a cost of $212,000 has an estimated useful life of 15 years, What was the book value of the equipment at December

Which is true with regard to a three-for-two stock split : Stock dividends and stock splits can be used to accomplish the same objective, Which is true with regard to a 3-for-2 stock split?

Record the december adjusting entry : Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek uses the straight-line method

Emergency operations center for your company : Describe the activities that need to occur to setup the emergency operations center for your company, and where your company should locate the center.

Classify each costs as capital or revenue expenditure : Rebuilt the transmission on one of the vans that had been driven 40,000 miles. Classify each of the costs as a capital expenditure or a revenue expenditure

Calculate the share price of bravos after the levered : Capital of 12% and a marginal corporate tax rate of 20%. Using the APV method, calculate the share price of Bravos after the levered recapitalization.

User Account

All Pages