What is the effect of the declaration and subsequent issuance of a stock split (effected in the form of a stock dividend) on each of the following?

1 year ago

Rakesh Khan

1 minute

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What is the effect of the declaration and subsequent issuance of a stock split (effected in the form of a stock dividend) on each of the following?

A) Retained earnings: no effect; Paid-in capital: no effect
B) Retained earnings: no effect; Paid-in capital: increase
C) Retained earnings: increase; Paid-in capital: decrease
D) Retained earnings: increase; Paid-in capital: increase

Answer: A

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