Question

Design Dividends on preferred stockCorporation has 400,000 shares of $10 par-value common stock issued and outstanding when the market price per share is $25 per share.
By what amount will total equity increase when the company declares a 2:1 stock split?


A : $2,000,000


B : $0


C : $6,000,000


D : $4,000,000

Answer 1

Answer:

correct option is B : $0

Explanation:

given data

shares = 400,000

common stock = $10

market price = $25 per share

to find out

what amount will total equity increase when the company declares a 2:1 stock split

               

solution

we know that here stock split never increased the stockholders equity

so that here it will increases only the number of shares

as that we can say correct option is B : $0