Sheldon, Inc

question 106

Multiple Choice

Sheldon, Inc. declared a stock dividend of 100,000 shares on a date when the company's common stock was selling for $19 per share. Prior to this date, Sheldon had 100,000 outstanding shares of $1 par value common stock. As a result of this stock dividend, Sheldon's common stock will ________, the additional paid-in capital will ________, and the retained earnings will ________.

• A) decrease $100,000; decrease $850,000; increase $950,000
• B) increase $100,000; not change; decrease $100,000
• C) increase $100,000; increase $850,000; decrease $950,000
• D) decrease $850,000; decrease $850,000; not change

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Definitions:

Asset Value

Asset value is the total value of a company's or individual's assets, calculated by summing the market value of all tangible and intangible items.

Net Asset Value

The total value of a fund's assets minus its liabilities, often used in the context of mutual and exchange-traded funds.

Investment Company

A trust or corporation that focuses on deploying the aggregated investments of individuals into financial securities.

Mutual Fund Assets

The total market value of all financial assets held by a mutual fund.