Which of the following would result in a decrease in the number of shares outstanding and an increase in the earnings per share?
A)Cash dividend
B)Stock dividend
C)Reverse stock split
D)None of the above result in a decrease in the number of shares outstanding

Question

Quizplus · Accepted Answer

A reverse stock split involves reducing the number of outstanding shares by combining multiple shares into one. This leads to a decrease in the number of shares outstanding and an increase in the earnings per share. A cash dividend and a stock dividend distribute profits to shareholders without affecting the number of outstanding shares. Therefore, they do not result in a decrease in the number of shares outstanding and an increase in the earnings per share.

Which of the Following Would Result in a Decrease in the Number