The Larson Company has 100,000 shares of $10 par value common stock outstanding that was originally issued
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Question:
The Larson Company has 100,000 shares of $10 par value common stock outstanding that was originally issued for $18 per share. In the current year, when the price of this stock increased to $60 per share, the company's board of directors issued a two-for-one stock split. The price of the stock immediately fell to $30 per share.
By what amount should the company reduce its Retained Earnings balance as a result of this split ?
$1,000,000 | ||
$3,000,000 | ||
-0- | ||
$6,000,000 |
Expert Answer:
A stock split does not affect the total equity of a company including retained earnings It m... View the full answer
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