Which of the following occurs when a 2-for-1 stock split is declared?
A) The balance in Common Stock remains the same.
B) The balance in Common Stock is reduced to half the original amount.
C) The balance in Common Stock doubles.
D) The balance in Paid-in Capital in Excess of Par-Common doubles.

Question

Quizplus · Accepted Answer

When a 2-for-1 stock split is declared, the number of shares outstanding doubles, but the par value per share is reduced by half. Therefore, the balance in Common Stock remains the same as the total monetary value of the shares outstanding remains unchanged.

Which of the Following Occurs When a 2-For-1 Stock Split