Which of These Is Not a Reason for Declaring a Share

question 54

Multiple Choice

Which of these is not a reason for declaring a share dividend?

• A) To conserve the company's cash instead of declaring a cash dividend.
• B) To decrease the market price of the shares.
• C) To raise extra capital for the company.
• D) To give shareholders extra shares.

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Definitions:

Proportionate Consolidation Method

A method of accounting where a parent company includes its share of the assets, liabilities, income, and expenses of a joint venture or associate in its financial statements proportionate to its ownership interest.

Identifiable Net Assets Method

An accounting technique used to value a company by identifying and valuing its tangible and intangible assets separately from goodwill.

IFRS

International Financial Reporting Standards are globally accepted standards for accounting, aiming at bringing transparency, accountability, and efficiency to financial markets around the world.

Bargain Purchase

An acquisition where the purchase price is significantly lower than the fair market value of the acquired assets.