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How would a stock split affect the par value of the stock and the company’s shareholders’ equity?

Par Value                    Shareholders’ Equity

A. Decrease                                        Increase

B. Decrease                                    No change

C. Increase                                        Decrease

D. Increase                                      No change

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Question added by Deleted user
Date Posted: 2015/02/27
VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Par  value   B. Decrease                    No change :     Share holder's equity

aziz urrehman
by aziz urrehman , key account executive , alkhair group of companies foam manufacturing

B is the correct answer becuase the par value decrease and the equity remain constant.

Mir Mujtaba Ali
by Mir Mujtaba Ali , Internal Audit Manager , Confidential

A stock split results in more outstanding shares at a lower par value per share. The total value of stock outstanding is unchanged

imran Noor -
by imran Noor - , Audit Officer , Auditor General of Pakistan

In stock split, one share is split into2 or3....... and so the par value decreases in that proportion. The total equity does not change.

Option (B) is correct.

Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

answer B is the correct answer

Ezzidin Ibrahim
by Ezzidin Ibrahim , Financial Controller , Karim Food Industries

B. Decrease                                    No change

Muhammad Imran
by Muhammad Imran , Head of Accounts & Company Secretary , Fauji Infraavest Foods Limited

Par value will decrease and

Equity of stock holders will not change.

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