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By what amount company reduce its retained earnings balance

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Reference no: EM131771036

Question - A Company has 100,000 shares of $10 par value common stock outstanding that was originally issued for $18 per share. In the current year, when the price of this stock increased to $60 per share, the company's board of directors issued a two-for-one stock split. The price of the stock immediately fell to $30 per share. By what amount should the company reduce its Retained Earnings balance as a result of this split?

a zero

b 1 million

c 3 million

d 6 million

Reference no: EM131771036

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