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:

Disparity

Refers to a lack of equality or similarity, especially in a way that is unfair.

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The judicial determination of a punishment to be imposed on a person found guilty of a crime.

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