All of the Following Statements Regarding Stock Dividends Are True

question 49

Multiple Choice

All of the following statements regarding stock dividends are true except:

• A)Directors can use stock dividends to keep the market price of the stock affordable.
• B)Stock dividends provide evidence of management's confidence that the company is doing well.
• C)Stock dividends do not reduce assets or equity.
• D)Stock dividends decrease the number of shares outstanding.
• E)Stock dividends transfer a portion of equity from retained earnings to contributed capital.

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