A stock split:
ADecreases face value and increases share count
BIncreases face value
CIs the same as cash dividend
DReduces total equity
Answer & Solution
Correct answer: A. Decreases face value and increases share count
1. Stock split: 2-for-1 split halves face value and doubles share count.
2. Total equity unchanged.
3. Increases liquidity and accessibility for retail investors.
_Source: ICAI BoS CA Inter Paper 6A, Ch 8 "Dividend Decisions", §3_