Which of the following statements is false?
A)Both stock splits and stock dividends increase the number of common shares issued.
B)Both stock splits and stock dividends increase the number of common shares outstanding.
C)Stock splits reallocate amounts between retained earnings and contributed capital accounts.
D)Both stock splits and stock dividends have the impact of reducing the market price of the stock.

Question

Quizplus · Accepted Answer

Stock splits do not reallocate amounts between retained earnings and contributed capital accounts. Instead, they increase the number of shares outstanding while reducing the par value of each share, which affects only the contributed capital account. Retained earnings are unaffected by stock splits.

Which of the Following Statements Is False