When a company splits its common stock 3 for 1:
A)total paid-in capital increases by a factor of 3.
B)retained earnings is decreased by the market value of the shares issued.
C)the market value of the company's stock normally falls by two-thirds.
D)the stockholders are assured of receiving larger cash dividends.

Question

Quizplus · Accepted Answer

In a 3-for-1 stock split, the number of shares increases threefold, and the market value per share typically falls to one-third of its pre-split value, keeping the overall market capitalization the same.

When a Company Splits Its Common Stock 3 for 1