Which of the following statements is correct?
A)A 2-for-1 common stock split decreases both earnings per share and total stockholders' equity.
B)A 10% common stock dividend decreases both earnings per share and total stockholders' equity.
C)A 2-for-1 common stock split increases both the number of common shares outstanding and total stockholders' equity.
D)A 30% common stock dividend increases the number of common shares outstanding and does not affect total stockholders' equity.

Question

Quizplus · Accepted Answer

A 30% common stock dividend increases the number of shares outstanding but does not affect the total stockholders' equity. It redistributes the equity among a larger number of shares without changing the total amount of equity.

Which of the Following Statements Is Correct