Issuing new shares of stock in a five-for-one split of common stock would:
A)decrease the book value per share of common stock.
B)increase the book value per share of common stock.
C)increase total stockholders' equity.
D)decrease total stockholders' equity.

Question

Quizplus · Accepted Answer

If the number of shares increases the book value per share is decreased as illustrated in the formula:
Book value per share = (Total stockholders' equity - Preferred stock)F1F1F1S1F1F1F10 Number of common shares outstanding

Issuing New Shares of Stock in a Five-For-One Split of Common