Gilbert corporation's board of directors approved a 2-for-1 common stock split. the common stock had a $10 par value before the split. at what amount should retained earnings be reduced for the additional shares issued?

a. retained earnings is not affected by a stock split.

Question

Chandler Brewer

Business

11 February, 06:51

Gilbert corporation's board of directors approved a 2-for-1 common stock split. the common stock had a $10 par value before the split. at what amount should retained earnings be reduced for the additional shares issued?

a. retained earnings is not affected by a stock split.

+1

Answers (1)

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Quinn Harrington · Answer 1

The answer is, " retained earnings is not affected by a stock split".

A stock split refers to a corporate activity in which an organization or company separates its current shares into various shares to support the liquidity of the shares. In spite of the fact that the quantity of shares exceptional increments by a particular multiple, the aggregate dollar estimation of the shares continues as before contrasted with pre-split sums or amounts, in light of the fact that the split does not include any real value. The most well-known split proportions are 2-for-1 or 3-for-1, which implies that the investor will have a few shares, individually, for each share held before.

Gilbert corporation's board of directors approved a 2-for-1 common stock split. the common stock had a $10 par value before the split. at what amount should retained earnings be reduced for the additional shares issued?a. retained earnings is not affected by a stock split.

Gilbert corporation's board of directors approved a 2-for-1 common stock split. the common stock had a $10 par value before the split. at what amount should retained earnings be reduced for the additional shares issued?

a. retained earnings is not affected by a stock split.