Which of the following statements about a 2-for-1 stock split is not true?
A)The market value of the shares will probably decrease.
B)A shareholder with 200 shares before the split owns 400 shares after the split.
C)Legal capital per share is reduced to half of what it was before the split.
D)Total share capital increases.

Question

Quizplus · Accepted Answer

A 2-for-1 stock split does not increase the total share capital; it merely divides the existing share capital into a greater number of shares, reducing the nominal or par value per share accordingly. The total value of shares held by shareholders remains the same, just distributed over a larger number of shares.

Which of the Following Statements About a 2-For-1 Stock Split