Which statement is true about a stock split? Multiple Choice Total shareholders' equity remains the same. Total shareholders' equity decreases. Total shareholders' equity increases. A change in total stockholders' equity depends upon whether it is a 2-for-1 split or a 3-for-1 split.

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Business

Kirsten Mcmahon

22 October, 06:33

Which statement is true about a stock split? Multiple Choice Total shareholders' equity remains the same. Total shareholders' equity decreases. Total shareholders' equity increases. A change in total stockholders' equity depends upon whether it is a 2-for-1 split or a 3-for-1 split.

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Answers (1)

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Lilyana Villarreal · Answer 1

The correct option is total shareholders' equity remains the same

Explanation:

Stock split is about re-denomination of existing shares by splitting for example one share into two whereby the two new shares assume the value of one old share.

It is usually done to boost shares trading by making a share price affordable and within the reach of many potential investors.

All in all, the stockholders' equity remains the same since no cash consideration is paid for stock split