When a Stock Dividend Is Declared and Issued

question 26

Multiple Choice

When a stock dividend is declared and issued:

• A)total paid-in capital does not change.
• B)total stockholders' equity does not change.
• C)retained earnings is normally decreased by the par value of the shares issued in the dividend.
• D)total paid-in capital is decreased by the market value of the shares issued in the dividend.

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Definitions:

Liability

Legal responsibility or obligation that arises from actions or as a result of a contractual agreement, potentially requiring the liable party to compensate for damages or losses incurred.

Underwriters

Underwriters are entities, such as banks or financial institutions, that assume the risk associated with issuing and selling securities in the market.

Racketeer Influenced and Corrupt Organizations Act

A U.S. federal law aimed at combating organized crime by allowing extended penalties for criminal acts performed as part of an ongoing criminal organization.

Predicate Offenses

Specific crimes that provide the grounds for charging someone with more serious offenses, such as racketeering or money laundering.