Which one of the following does not affect the total equity of a firm but does increase the number of shares outstanding?
A)special dividend
B)stock split
C)share repurchase
D)rights offer
E)liquidating dividend

Question

Quizplus · Accepted Answer

A stock split does not affect the total equity of a firm because it does not change the total value of the shares outstanding. However, it does increase the number of shares outstanding while decreasing the price per share proportionally. Therefore, the total market value of the shares remains the same. The other options (special dividend, share repurchase, rights offer, and liquidating dividend) can all affect the total equity of a firm in different ways.

Which One of the Following Does Not Affect the Total