Multiple Choice
A corporation has 3 million shares of outstanding stock issued at market price of $5.It also has $45 million of retained earnings on its balance sheet.It announces a 2 for 1 stock split on August 1.The market price of the stock on that day is $12 per share.Which of the following would be the implication of this stock split?
A) Contributed capital will increase by $36 million
B) Retained earnings will decrease by $36 million
C) Dividends payable will increase by $36 million
D) No accounting entry will be made on this announcement.
Correct Answer:
Verified
Correct Answer:
Verified
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