When a Dividend Is Declared and Paid in Stock

question 4

Multiple Choice

When a dividend is declared and paid in stock,

• A) total stockholders' equity does not change.
• B) total stockholders' equity decreases.
• C) the current ratio increases.
• D) the amount of working capital decreases.

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Definitions:

Economies Of Scale

The cost advantage that arises with increased output of a product, as the fixed costs are spread out over more units of production.

Merger

The combination of two or more companies into a single entity, often with the goal of increasing market share, reducing costs, or gaining access to new markets or technologies.

Hard Objectives

Specific, quantifiable, and often financial goals that an organization aims to achieve.

Social Issues

Social issues refer to problems that influence a considerable number of individuals within a society.