Which of the following statements accurately explains why the board of directors of a company whose financial future contains some uncertainties might issue a 2-for-1 stock split rather than declare a 100% stock dividend?
A)A stock split would not reduce the market price per share,whereas a stock dividend would.
B)A stock split would reduce the market price per share,whereas a stock dividend would not.
C)A stock split would increase total stockholders' equity,whereas a stock dividend would not.
D)A stock split would not reduce retained earnings,whereas a stock dividend would.

Question

Quizplus · Accepted Answer

A stock split does not affect retained earnings, while a stock dividend reduces retained earnings by transferring part of it to paid-in capital.

Which of the Following Statements Accurately Explains Why the Board