A reduction of par or stated value of stock results from a
A) liquidating dividend
B) stock split
C) stock option
D) preferred dividend

Question

Quizplus · Accepted Answer

A reduction of par or stated value of stock results from a stock split where the number of outstanding shares increases while the par or stated value decreases, essentially dividing the existing stock into multiple smaller pieces. Liquidating dividends are distributions made to shareholders when a company is closing down or selling off its assets, preferred dividends are payments made to preferred shareholders before common shareholders, and stock options are contracts that give employees the option to purchase company stock at a certain price.

A Reduction of Par or Stated Value of Stock Results