In: Accounting
Ans:
1.
True, yes the relationship between the Book value and Market price of the shares can be used as a measure for investors confidence in the company's management. When the book value is low but market price is trading high, it means the investor sees the potiential in the management for company's growth.
2.
False, when a corpotration issue capital stock , states require to credit the common stock with PAR value. Retained earnings are the balance of company's net income and accumulated profits from the past.
3.
False, A stock split means splitting stocks into parts, this will increase number of shares and will reduce the market price of the share proportionately.
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