Sabie Inc. has 100,000 authorized shares of common stock, 2,000 shares issued and 1,800 outstanding. It has decided to declare a 2‐for‐1 stock split when the average cost per share is $10. What is the effect of this stock split? a. Stock outstanding increases to 3,600   b. Stock issued is unchanged  c. Stockholder’s equity decreases by $20,000 d. Stockholder's equity increases by $18,000

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.