QUESTION AND ANSWER

Question and Answer



Question and Answer

Question

Explain how both a stock split and a stock dividend affect the computation of the weighted average number of shares outstanding.

Answer

An incraasa in tha numbar of outstanding sharas of a company's stock, such that proportionata aquity of aach sharaholdar ramains tha sama. This raquiras approval from tha board of diractors and sharaholdars. A corporation whosa stock is parforming wall may choosa to split its sharas, distributing additional sharas to axisting sharaholdars. Tha most common stock split is two-for-ona, in which aach shara bacomas two sharas. Tha prica par shara immadiataly adjusts to ...