A Corporation with $10 Par Common Stock Issues a Small

question 198

Multiple Choice

A corporation with $10 par common stock issues a small stock dividend.The capitalization of retained earnings is equal to:

• A)The par value of the shares to be distributed.
• B)The par value of the shares outstanding.
• C)The market value of the shares to be distributed.
• D)The market value of the shares outstanding.
• E)There is no capitalization of retained earnings in the case of a small stock dividend.

---

Definitions:

Semiannually

Occurs twice yearly or every six months interval.

Debt Investments-HTM

Acronyms for "Held-To-Maturity," these are debt investments that a company intends and is able to hold until they mature.

Long-Term Investments-Trading

Long-term investments-trading refers to the purchase of securities with the intention of holding them for an extended period to benefit from their long-term appreciation, dividends, or interest earnings.

Bonds

Fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental.