The Directors of Corel Corporation, Whose $40 Par Value Common

question 28

Multiple Choice

The directors of Corel Corporation, whose $40 par value common stock is currently selling at $50 per share, have decided to issue a stock dividend. The corporation has an authorization for 200,000 shares of common, has issued 110,000 shares of which 10,000 shares are now held as treasury stock, and desires to capitalize $400,000 of the retained earnings balance. To accomplish this, the percentage of stock dividend that the directors should declare is

• A) 10
• B) 8
• C) 5
• D) 2

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Definitions:

Earth

The third planet from the Sun in our solar system, home to diverse ecosystems and the only known place in the universe supporting life.

Amino Acids

Organic compounds serving as the building blocks of proteins, containing both amino and carboxylic acid functional groups.

Tidal Flat

A flat, muddy area of land that is covered and uncovered by the sea at high and low tides, respectively.

Clay Particles

The fine-grained mineral components of clay, usually less than 2 micrometers in size, contributing to its unique properties such as plasticity when wet.